How to Lower Homeowner Insurance

Like most other forms of insurance, homeowner's insurance has increased dramatically over the past two decades. There are many reasons for this, including costly storms and many other natural disasters. It is important to understand how the insurance rates are determined, and how to keep them relatively low.

The key in trying to keep your homeowner's insurance low is to examine what makes it increase, and try to avoid those factors. There are also other ways that you can lower your insurance rates, by being proactive in assessing your situation and reporting any changes to your agent.

Lowering homeowner's insurance rates:

• Only report serious claims. The best way to look at homeowner's insurance is to consider it only for catastrophic losses. Do not report minor damages to the insurance company for claims. The number of claims you take to the insurance company will negatively impact your insurance rates. The premium will increase, and they may drop you completely.


• Examine your deductible. Keeping in mind that you are only going to report serious losses, you should raise your deductible to a higher one. If your deductible is now $500, consider raising it to $1500 or $3000. The higher the deductible, the lower your rates will be.


• Reassess the value of what is insured. Traditionally, it was important to do this to make sure that you were not under-valuing your home while the home values increased over time. In the past few years, however, they have been in decline. You may be able to lower your policy according to home value re-evaluation. Just make sure that you are still covering replacement value.


• Have safety equipment in your home. Even something as simple as a fire extinguisher will lower your insurance rates. Make sure to let your agent know that you have such items, home security system, or various security precautions.


• Location. If you haven't purchased a home yet, consider the location. Homes near tidal water, particulary beaches, will have homeowner insurance rates significantly higher than homes inland. Some companies limit the number of policies they can write in such areas, and others will not even insure beach communities, or other areas they consider high risk.