Saving Money on Home Insurance: An Agent's Advice

Most home insurance agents gain new customers daily from these scenarios:

• A new home owner purchasing their first home
• A home owner who got a significant rate increase on their home insurance renewal
• A home owner who has had a "falling out" with with their current         insurance agent or insurance company
• A home owner who has received a cancellation notice from their current insurance company due to claims history or other factors

All of these prospective customers ask the question: "How can I save money on my home insurance?":

1. Shop around. While this is time consuming, it's usually well worth the consumer's time to make some calls and inquiries. The public is usually not aware of individual insurance companies "growth strategy." Company A might be raising rates to lower exposure in a market, while Company B may be looking to grow in a certain market.

2. Give the agent full disclosure of your circumstances. If your home is equipped with a monitored security alarm, tell the agent. You may have a hail or fire resistant roof, be sure to disclose this. Remember, this is your home, you know it well, the agent does not. If you have prior claims (customarily in the past three years), now is the time to disclose them to the agent. Better to get a true and accurate quote than a "suprise" premium when the policy is issued.

3. Ask the agent coverage questions. A good example of this is "What insurance form is this policy written on?" Be prepared for the agent to give you a minature education on insurance. Usually, each state uses an approved form, promulgated (defined) by that state's department of insurance. For example, Homeowner Form A may be an "actual cash value" policy, while Form B may be a "replacement cost" policy. No home owner wants to find out during a claim what is covered and what is not.

4. Compare similar coverages and policies when comparing rates. Don't fall into the trap of getting $150,000 dwelling quote from Company X and a $175,000 quote from Company Z. The public often refers to this type of shopping as "comparing apples to apples."  It's a good approach, most insurance shoppers should use it.

5. Inquire about multi-policy discounts. Most insurance companies are likely to give you a better rate if you bring your auto insurance or life insurance business over to them. Compare the "whole package price" to see if moving all of your insurance to one carrier is financially justified.

6. Take a higher deductible. Sharing the burden of a potential claim is normally a great way to lower home insurance costs. Considering a 1 percent deductible or $1,000 over a $500 deductible might make fiscal sense. Insurance companies are stressing the use of insurance more for true catasthophes versus minor upkeep on homes. Insurance was always meant to be for major losses. If you are a habitual claimaint, you may find yourself being non-renewed by your insurance company and in this event, it will be more difficult to acquire new home insurance.

7. Keep your credit history clean. Many insurance companies are now using credit algorithms to determine the likelihood and severity of possible claim. While maintaining a good credit history is often times out of the home owner's control (due to mitigating circumstances), know that credit reports and loss history are usually major factors in getting the best rate on home insurance.