Drop Home Insurance Costs

Typical homeowner policies don't cover damage from a flood. You need a special flood insurance policy backed by the federal government, with cooperation from local communities and private insurance companies. Flood insurance is relatively inexpensive, although only about one-quarter of the homes in the most vulnerable areas are insured against flood loss. Check out this site for the latest on low-cost, government-sponsored flood insurance: http://www.fema.gov/business/nfip/index.shtm.

It used to be a chore to compare insurance coverage costs but no more, thanks to the Internet. Now you can log on and check out five or six insurers all in one place. Go to a search engine and type in "home insurance" to find the lowest rates available in your area.

Use a camera or video recorder to capture images of your furniture, appliances, clothes and other possessions. Write down the serial numbers of things like your TV and stereo. If you can show your insurance company documented evidence of what you own, your claim for lost items will be processed faster.

Buy your home and auto policies from the same insurer. Some companies that sell homeowners, auto and liability coverage will knock five to 15% off of your premium if you buy two or more policies from them. But make certain this combined price is lower than buying the different policies from different companies.

You can cut corners on homeowners insurance by limiting the dollar amount of your coverage and the liability of the insurance company by increasing your deductible. But what if the unthinkable happens and your home is destroyed? You might have saved a few thousand dollars over the years, but you stand to lose more than that in a catastrophe.

Have you seen those flyers in the mail that guarantee to pay off your mortgage in case you die in an accident? Think about it - how many people actually die in accidents? It's pretty rare and these policies pay out nothing if you die a natural death.

If you own a second home, you probably already know that the insurance on that second home can cost 10-20% more than the insurance on your main home. Several insurers offer two-fers - a bundled package that covers both homes for less than individual coverage on each property.

Save money on insurance costs by raising your deductibles. Deductibles are the amount of money you pay toward a loss before your insurer kicks in some dough, according to the terms of your policy. The higher your deductible, the more money you can save on your premiums. Most insurance companies recommend a deductible of at least $500. If you can afford to raise your deductible to $1,000, you may save as much as 25%.

Many insurance companies offer special policies for mobile home owners that cost a lot less than regular homeowner's coverage. Talk to your insurance agent to see if you're getting the best deal on your mobile home.

Stay with the same insurer. If you've kept your coverage with a company for several years, you may receive a special discount for being a long-term policyholder. Some insurers will reduce their premiums by 5% if you stay with them for three to five years and by 10% if you remain a policyholder for six years or more. But make certain to periodically compare this price with those of other policies.

If you live in a condominium (or plan to), don't buy a complete homeowner's package. The condo association pays an insurer to cover the actual building in which you live (part of your monthly fees), so save some dough by getting special condo coverage that simply protects everything inside your home.

If you file a claim every time you break a lamp, chances are your insurance company will drop you like a hot potato. Use your homeowner's coverage to protect you from disasters like a house fire or a tree falling on your house.

Homeowners have a number of options when it comes to insuring their most valuable possession. The least expensive coverage is called actual cash value (ACV) coverage which pays you the value of your home minus a deductible. Full replacement coverage pays to have your home rebuilt as it was before the disaster. Extended coverage costs the most but guarantees to cover your homebuilding expenses even if those expenses are greater than the actual coverage you've been paying for.