Nine Ways to Save Money on Homeowner's Insurance

In today's economy, most people are cutting corners and saving wherever possible. Every little bit helps, every dollar counts and a savings of 10 percent or more on expenses can really add up. One of the best places to save money is on homeowner's insurance, although many overlook this as a cost-savings opportunity. Think about it. Reducing the price of your homeowner's insurance can save you hundreds monthly and thousands yearly. Read on for nine ways to save on your homeowner's insurance.

1. Consider insurance costs when you buy your home.
Before buying a home, consider the cost of insuring it. Don't just jump in and make this major purchase because you "like the house." Look deeper. Consider electrical and plumbing systems, energy efficiency, the age of the home, its location and the likelihood of disasters. These factors will significantly affect the cost of your homeowner's insurance.

2. Shop around and compare prices.
The best way to save money on your homeowner's insurance is to shop around. Don't just use an insurance company because you think the price is reasonable and the benefits meet your needs. There are hundreds of insurance agencies and individual agents out there that would love to have your business. Chances are there is at least one that can give you a better deal. This may be a tedious task but in the long run, it's worth it.

3. Combine policies with the same company.
Be sure and use the same company for your home, auto and life insurance and whatever additional policies you carry. Combining your insurance policies almost always means you'll get a cheaper rate. Insurance companies are often willing to give you a 15 percent discount.

4. Improve home security.
Installing a security system in your home greatly benefits the insurance company. It helps to reduce the liability of theft, fire and other mishaps. As a way of saying thanks, insurance companies will often reduce the cost of your homeowner's insurance if you have an alarm that detects fire and theft, especially one that automatically alerts local emergency dispatchers. Installing security systems can be very costly and not every company offers this type of discount, so before you go out and have the latest and greatest alarm system installed, be sure and talk with your insurance agent.

5. Longevity pays off.
Once you have found an insurance company that meets your needs, stay put. The longer you stay with the same insurer, the greater the benefits. As a valued customer of five or 10 years, you will get more discounts and customer loyalty rewards.

6. Pay a higher deductible.
Deductibles are what you have to pay on a loss before your insurance company pays. This varies according to the terms of your policy, although the typical deductible is $500. This means if something happens to your house or insured valuables, you pay the first $500 and your insurance pays the rest. Raising your deductible to $1,000 or more will save you quite a bit on your monthly insurance expense.

7. Insure your home, not the land it sits on.
Your home and the valuables inside are at risk from the damages of fire, the loss of theft and the devastation caused by "acts of God" or unforeseeable events. The land your house sits on is not at risk. Never include the value of your land in determining how much homeowner's insurance you need.

8. Keep a great credit score.
Insurance companies often run credit checks and charge a rate based on credit scores. Keep your credit score in optimal standing to ensure you get the lowest rates. If you have bad credit, go with companies that don't check.

9. Make e-payments.
It may seem simple but making payments online saves money. Not only do insurance companies offer discounts for going paperless, you'll save on postage and eliminate the hassle of mailing a monthly bill.