This is for you: If you haven't shopped around in a while for homeowners insurance, or something has changed in your current situation (new security system, new house, etc...).
Hands-on time: 60 minutes or less, unless you chat with multiple agents.
Total time: From a couple of hours to a couple of days, depending on whether you get a cheaper policy from your current insurer or sign up with a new company, and how quickly you pay the new premium, if applicable. Add a bit more time if you think an error on your credit report could be affecting your premium. Once you pay the premium, the policy is binding.
Cost: Nothing to compare quotes. The average estimated cost of homeowners insurance this year was $879, but it will depend on location, construction, and the age of the home.
What you'll need:
1. Your current homeowners policy (so you can refer to what coverage you already have, if you need to)
2. Some specific knowledge about your home (if you don't know all this, an insurance agent can sometimes help you figure it out), including:
- The distance to the nearest fire station and fire hydrant
- Whether your home is within a designated flood plain
- The year it was built
- The square footage
- The number of stories, bedrooms, baths, fireplaces
- The type of foundation
- The type of garage
- The type of exterior walls
- The type and age of the roof
- The type of wiring
- The type of heating system
- Whether you have a burglar alarm (and what kind it is)
- Whether you have a fire alarm (and what kind it is)
- Whether you have a trampoline, swimming pool, deck/patio, dead bolts, fire sprinklers, fire extinguishers, or smoke alarms
- The breed of any dogs you have. (Homeowners insurance covers dog bites, so owning a Doberman may cost you more than the vet bills.)
Lower the cost:
- Buy in bulk. Get homeowners insurance from the same company that insures your car (or vice versa). You might be able to get a multiline discount, which could save you as much as 30 percent.
- Raise your deductible. Most people quickly opt for a plan with a $500 deductible, which is totally respectable . . . if you don't mind paying more money. But if you increase your deductible to $1,000 or higher, your premium will likely drop. Just make sure you can afford to foot the bill if you make a claim. Remember, a higher deductible means you'll have to pay more out of pocket before your insurance coverage kicks in. (But the good news is the average homeowner doesn't make a claim all that often-about every 7 years.)
- Pull your credit report. Are there errors? A low credit score could be making your premiums higher. Correct the credit rating agencies (remember to contact the big three, TransUnion, Experian and Equifax) and explain the error. Then tell your agent to check your credit again-you might score a lower premium. (You can get your free credit report by going to www.annualcreditreport.com.)
- Keep your insurer up to date. Certain home renovations may earn you a discount. Examples: a new roof or a new central air or furnace system.
- Think about safety. Insurers knock premiums down for things like dead bolts, fire extinguishers, smoke detectors, and home security systems.
- Pay up front. You may be able to get a break if you pay every six months or once a year instead of paying monthly. (This would be a small discount. You're really just saving the company the administrative cost of billing you every month.)
- Buy new. Brand spanking new houses enjoy insurance premiums that are about 25 percent lower than older homes. (We're not telling you to rush out and buy a new house. We're just saying.)
What to do:
1. Call your insurance agent and ask if there might be ways to lower your premium. (See above.)
2. If your agent can't drop the price, or you want to make sure you're getting the best deal, do some comparisons.
- Visit Checkrates.com
- Select "home insurance" and enter your zip code to proceed.
- Fill out the requested information to the best of your knowledge.
- Once you submit your info, you'll receive a list of companies and agents (but no quotes). The agents will get in touch with you via email or phone with numbers (usually within 24 hours).
3. If you'd rather go straight to the source, call companies directly or visit their websites to get a quote.
4. If you found a lower premium than the one you're currently paying, congrats! Mission accomplished.
5. If you've already pre-paid your premiums and you find a lower rate with the same company, that company will likely either credit you the difference or send you a refund check. If you're going with a new company, make sure you cancel with your old insurer (after your new policy takes effect) and find out how they'll send you the pro-rated balance on your account, if any.
