The Circle of Safety: How To Save money on your HOMEOWNERS Insurance.

By Chet Cottom
Charter Member:

What you’ll discover in this report:

§        How not to get ripped off when buying protection for your family.

§        How do you get the most for your money?

 8 ways to SAVE MONEY on your home insurance...

Does any one Insurance Company Have the Lowest Price for Everyone!!! NO I expect that we all know deep down that it's not possible for any home insurance company – no matter what they claim in their ads – to offer the lowest price for every residence in every location. They may want you to think that, but it's just not true. Certainly, there are companies that are often among the lowest in most all cases. And there are companies that are usually among the highest. But no company has the lowest price for everybody.

* Tip.  Your Insurance Agency should be routinely (at least once a year) checking to see that the company they have you placed with, is still the best deal for you.

* Tip.  Also, be aware that prices fluctuate.  Sometimes companies “buy the market” with low prices that are actually below cost, to gain new consumers...with the intention of gradually – or not so gradually – increasing the premium until they are profitable.

Every company has a slightly different appetite for the risks it wants to take on. Some insurers want only very new or recently remodeled homes. Other companies specialize in insuring older, poorly maintained houses, since the premiums are so high. Most of the homes these companies insure have only limited coverage.

Some companies target homes in certain areas. There are insurers that really like to do business in big cities, and there are others that would prefer to stay away from highly populated areas. Others want homes in high-risk area's, such as hurricane and tornado locations. Most companies do not want to insure in those areas.

* Tip.  Remember that sometimes “you get what you pay for.”  The cheapest option may not provide you or your family with the best protection.  The saying goes, “you don’t need insurance until you have a claim.”  When you do have a claim – when something has gone wrong – that’s a terrible time to discover you don’t have adequate protection!          

* Note. An amazing 37% of all unpaid claims are due to dangerous gaps in insurance coverage.

So How Do You Get the Most for Your Money? Following are 8 Ways to Save Money on Your Homeowners Insurance...

Now that you know a little about homeowners insurance companies, here are 8 ways to help you pay less for your insurance. In many cases, you can even get better coverage -- for fewer dollars.

1.      Nice home, Nice Price? Insurers really like newer homes. That's because it is less likely that something will go wrong with the electrical, heating and plumbing systems. In addition, the structure itself is in better shape. Insurers offer additional discounts of as much as 8% to 15% if the residence was built in the last 10 or 15 years. But did you know that most homes qualify as “preferred rate homes” and are eligible for discounted premiums? However, some people with nice homes pay a lot more than others do.

Actually, most home insurers are actually a collection of several insurance companies, each catering to a certain quality of home. The older and most poorly maintained homes are placed with a standard or even substandard rate company, and the newest and best kept homes are sent to a preferred rate company. The paradox is that people paying preferred rates are usually paying less than others are, even though their homes are generally worth considerably more. However, many people have homes that are somewhat borderline, and are paying higher rates than they might need to.

 The point is, since most people do not know what would have to be done to qualify for better prices -- they end up staying at the same price level far too long. If you have recently made improvements to your home, and have been paying standard or substandard rates -- there is no reason you shouldn’t be able to be moved into preferred rates --paying the lowest price a group of insurance companies has to offer.

* Tip. Ask your agent for a list of the repairs needing to be done to get better rates. Then about two weeks before your policy renews (usually every year), see if you now qualify for a better company or price. Your agent will be happy to help. Keep in mind that only you really know if your home has been improved, so it is imperative that you notify your Agency when you are finished.

     2.      Raise Your Deductible. The deductible is the amount you pay before insurance kicks in, when you have a claim. The lower the deductible you choose, the more you pay. If you have reasonable assets, you can probably afford to absorb at least $250 to $500 if you have a claim. * Example.   If you have a $250 deductible and you file a claim for $1,000 in damage to your home, you pay the first $250 and your insurer pays the balance, $750. * Tip.  Depending on the insurance company, you can save between 12% and 37% if you have a deductible of $500 to $5,000.Insurers really like newer homes. That’s because it is less likely that something will go wrong with the electrical, heating and plumbing systems. In addition, the structure itself is in better shape. Insurers offer discounts of as much as 8% to 15% if your residence was built in the last 10 of 15 years. 3.      Insure the House, Not the Land -- Nobody is going to steal your land. Fire and high winds won’t “destroy” it. As such, when deciding how much homeowners coverage to have, don’t include the value of the land, only the value of the house and any other buildings on the property. If you include the value of the land, you’re paying too much.   

     4.      Don’t Insure What You Don’t Have -- Each year, it is advisable to review your policy to see if the coverage you have for your possessions is adequate. If you have made a major purchase, you will want to increase your limits of coverage, but what if you sell something? The reverse is true, and you may not need as much coverage.

* Note.   Most homeowners policies are a package of coverages, designed to provide an average amount of coverage, for the average family. As such, the amount of coverage you select for the structure of your home will dictate the minimum amount of the other coverages included in the policy. For example, if your home itself is insured for $100,000, most policies include coverage for "separate structures" at 10% of the home value -- or $10,000. Therefore, you will not be able to reduce coverage any lower than the $10,000.

* Tip.   Pay particular attention to items that are covered by endorsements or “floaters” to your policy, items such as jewelry and computer equipment.  If you no longer have them, don’t insure them! This is particularly important, since some types of floaters can be fairly expensive. For example, gun floaters are not cheap. So if you sell some of your guns, reduce your coverage to get a better price.

     5.      Better Safe(r) Than Sorry -- Smoke detectors, burglar alarms and deadbolt locks are usually worth discounts of at least 5%. You can get even bigger discounts, 15% to 20%, if you install a sophisticated sprinkler system or an alarm system that rings at the police station or a security company. However, not all of these systems qualify for discounts.

* Tip.   Before you install one, check with your insurer to find out what type of system qualifies for a discount and how much you would save on your premium if you installed the system.

     6.      Where There’s Smoke . . .  -- There’s fire. Smoking, and the related hazards such as unattended cigarette butts, bed fires, etc. produce more than 23,000 residential fires in this country each year. Therefore, it is understandable why many insurers offer a discount rate for your homeowners insurance premium, if all the residents in the home are nonsmokers. Since many people have quit smoking in the last few years, you may ow deserve this additional price break.

     7.      A Bite Is Worse Than A Bark -- If you have a dog or dogs, particularly if it’s a more vicious breed, you will pay more for liability coverage. More and more dog bite claims are being brought, which has some insurers not exactly eager to provide coverage to homeowners who have, for example, Rottweilers, Pit Bulls and Dobermans. If you’re considering getting a dog, keep this in mind: If you get dogs of certain breeds, your premium will probably go up, or even more likely, your insurer could decide to cancel or non-renew your policy. For that matter, if your dog is likely to bite someone – of any breed – you are risking higher premiums and cancellation.

     8.     Location, Location, Location.      Where do you live and what is your home made of? If you’re in the Eastern United States, it’s better from an insurance perspective to have a brick or masonry residence because such a structure has a greater resistance to wind damage. By contrast, frame homes are better in the earthquake-prone West. The right structure in the right region can save you 5% to 15%. Further, if your home is near a fire station, you will pay less for homeowners insurance. * Note. If you live in an area that is prone to flooding, you will be required to buy a flood insurance policy if you borrow any money to buy your home. A flood policy will typically cost at least a couple of hundred dollars on up. In some cases they cost almost as much as your homeowners policy. * Tip. The areas designated as being in a flood zone are very deceptive. Many areas do not appear to be in danger of flooding, but are in fact included in the federal flood zone survey. You can find maps at your town planning and zoning department. An even easier way to see if a home you are interested in purchasing is in a flood zone, would be to visit your insurance agency. They should also have flood zone maps, and can also estimate the additional premium cost. Smart consumer. Protection for you and your family requires constant vigilance.... and a partnership between you and your professional agent. Other FREE reports by Chet Cottom:

          11 ways to save on your auto insurance.