Premium

Homeowners insurance provides coverage in the event of damages or losses to one’s home or personal property should a devastating event, like a fire or hurricane, occur.

To ensure that a homeowners insurance policy remains active and coverage is available if necessary, the policy holder will need to pay a premium. An insurance policy premium can be paid on a monthly, quarterly, bi-annual or annual basis.

Over the years, the average premium for homeowners insurance has increased. In 2006, the national average for a homeowners insurance premium was $804, according to the National Association of Insurance Commissioners. Fortunately, there are several ways that policy holders can bring their premiums down.

Easy Ways to Lower Your Homeowners Insurance Premium

Here are four simple ways in which you can lower your homeowners insurance premium:

1. Shop Around or Stay Put

   Depending on how long you have been with a particular insurance company, it might benefit you to either shop around or to stick with what you have. If you have been with your insurance company for a short time, you might be able to find more affordable coverage by contacting multiple agents and comparing rates.

   However, if you have been with your insurance company for a few years, you should contact your current agent to make sure that you are not missing out on any loyalty discounts. Often, insurance companies will offer a 5 percent discount if you have been with the company for three to five years. Some insurance providers even offer a 10 percent discount after six years of being with the company.

2. Raise Your Deductible
   • $1,000 deductible = 24 percent savings on your premium
   • $2,500 deductible = 30 percent savings on your premium
   • $5,000 deductible = 37 percent savings on your premium

   Some homeowners have very low deductibles but these low deductibles translate into significantly higher premiums. While these policy holders might believe that they are being responsible by covering any cost that should arise, typically if they do the math, they will find that the high premium far outweighs any potential benefit from not having to pay for anything.

   Instead, you should consider raising your deductible to at least $500 if not higher. A typical deductible on a homeowners insurance policy is $250. If you raise that deductible to $500, you could save up to 12 percent on your premiums. Raising your deductible even higher will save you even more money.

3. Combine Your Homeowners Insurance and Auto Insurance Policies

   Most homeowners will have a homeowners insurance policy and an auto insurance policy. By combining the two policies with the same insurance company, you could receive a discount ranging from 5 percent to 15 percent.

4. Increase Security of Your Home

   Policy holders often can get great discounts on their homeowners insurance policies by making their home more secure. Installing fixtures such as deadbolt locks, burglar alarms and smoke detectors could each result in a 5 percent discount. Some insurance companies also offer discounts ranging from 15 percent to 20 percent if the homeowner installs a sophisticated home-security system, like an alarm system that connects directly to the police or fire departments.