7 Simple Tips That Will Help You Lower the Cost of Your Home Insurance Policy

Mary Rand Home Insurance Editor

Reality Check: Do you pay more for your home insurance or your car insurance? Please share your thoughts, or simply say "hello" to us on our Facebook page!

Did you know that most home lenders require you to have a home insurance policy in order to secure a mortgage? Often, home owners simply buy a home insurance policy and forget about it in their monthly mortgage bill as it's part of their monthly impound with property taxes and PMI, among other things. Read your mortgage bill closely and see how much you're paying for home insurance.

I challenge you to see if you can save — it takes a budget shopper like you to find a cheaper home insurance policy. There are many easy ways you can save money on your homeowners insurance. Essentially, for every dollar you save on home insurance, your home mortgage is that much cheaper!

Your current home insurance company may be charging you too much compared to normal market rates. You may be able to benefit from new home insurance discounts.

Home Insurance Savings Tip #1: You Have to Shop and Compare Quotes to Save
You're obviously a budget shopper and know how to compare different prices. If you've recently purchased a home or would like to simply lower your existing home insurance policy, it only takes a few minutes to find multiple home insurance quotes online.

Home insurance rates a substantially different from company to company. In fact, the last time I compared home insurance rates, I found that one company was quoting about $650 (12-month policy) for the same coverage that I could find with another at $525. The coverage levels weren't exactly apples-to-apples though. One insurance company quoted me a home insurance rate with a deductible of $2,000. Although I don't have any intention of filing a claim, I am not comfortable with taking $2,000 out of my bank account in order for home insurance company to pay a claim. When I had them update the quote with a $1,000 deductible, the savings were not as wonderful. My point is: buyer beware!

Budget shoppers should compare home insurance quotes at least once a year. Believe it or not, home insurance rates are always changing and your current home insurance company may be charging you too much compared to normal market rates.

Home Insurance Savings Tip #2: Consider Adjusting Your Deductible
According to the Insurance Information Institute, most homeowners policy deductibles start at $250, therefore, if you increase that to $1,000, you may be able to save close to 25% on the cost of your home insurance! It's important understand that your deductible is the amount that your pay out of pocket when you file a homeowners claim. You must be able to afford your deductible, so make sure $1,000 isn't too high.

Home Insurance Savings Tip #3: Only Purchase the Insurance Coverage You Need
With all types of insurance policies, many consumers simply take the insurance quote at face value and simply pay. Look closely and question your insurance agent or quoting insurance carriers. Don't let them sneak in unnecessary coverage if it doesn't apply to you. For example, if you don't live in a designated flood zone, you may not need additional flood insurance coverage. Additionally, the value of your possessions is always changing; in many cases depreciating. Simply put, the larger the coverage levels on your policy, the more you pay for home insurance. Inventory of your home possessions and determine how much home insurance coverage you actually need.

Home Insurance Savings Tip #4: Car and Home Multi-Policy Insurance Discounts
Since you're taking the time right now to save on home insurance, take a few more minutes and get your car insurance budget in order as well. Doing so could yield simple multi-policy insurance discounts of both your car insurance and your home insurance. In fact, you could see an additional 15% insurance savings on both policies by combining both with the same insurance carrier.

Home Insurance Savings Tip #5: Home Security System Discounts
Obviously, having some type of home security system will decrease your chances of having your home robbed or completely destroyed by a fire. Most home insurance carriers offer large home policy discounts for homes that have alarm systems, double-locking doors, fire extinguishers, private security programs, and gated community programs.

Home Insurance Savings Tip #6: Home Structure Discounts
The type of home you live in and its structural integrity have a lot to do with how much you pay on home insurance. Obviously, if you live in a new home, all the electrical, plumbing and heating is probably in a better condition older homes. Make sure as you compare home insurance quotes, you pay close attention to detailing the unique structure elements of your home — it will affect your home insurance rates. When you speak with an insurance agent, ask: "Do I save any money on structure of my home?"

Home Insurance Savings Tip #7: Smokers Pay More for Home Insurance
Similar to life insurance policies, those who don't smoke have lower insurance rates on their homeowners insurance policy. If you're looking to save on an existing home insurance policy and you recently quit smoking, you may be able to find additional home insurance savings. It's no secret that smoking causes house fires, specifically 20,000 house fires in the a year, so it's no surprise why insurance companies charge more.

Important terms from this homeowners insurance article: discounts, home insurance, homeowners insurance, compare quotes, property insurance, non-smoker discount, multi-policy discount, deductible, homeowners insurance policy

Additional online information about home insurance: Home Insurance, Insurance Information Institute, Farmers Home Insurance