The average cost of a home insurance premium in the United States in 2010 was $909, according to the Insurance Information Institute. It’s a cost that many new homeowners may not consider when they’re shopping for a home, but it could be one of the most important things they every buy. Home insurance covers the structure of your home and the personal property within it from damages caused by named perils, including fire, smoke, windstorm, vandalism, and theft. These catastrophes can cause massive damage to your home or your belongings, which can be expensive to replace or repair. Although the cost of a premium may seem high, there are several ways you can lower the cost of your coverage. But before we can discuss that we need to understand how home insurance companies determine the cost of a premium.

Factors that Determine the Cost of A Home Insurance Premium:

  • The age, condition, and materials used to construct your home.
  • Crime rate in your neighborhood.
  • Building costs in your area.
  • Square footage of your home and any additional structures on your property.
  • The likelihood of damage from hurricanes, tornadoes, hail storms, flooding, and more.
  • Proximity to a fire station or a fire hydrant.

Insurance companies may also look at your claims history, credit score, and other factors when they determine your premiums. Many insurance providers offer discounts for home owners who take steps to reduce the chances of loss if something does happen. Read on to see how you can reduce your cost of insurance.

  • Raise Your Deductible: One of the easiest ways to save on your home insurance rates is to raise your deductible. The way to make this seem less risky is to set aside the deductible amount in savings so you have it on hand if you need to file a claim. Ask for quotes that give you several different deductible levels so you can see the difference in the rates. Some deductibles are a flat rate, but other policies have a deductible that is a percentage of your home’s insured value, which is normally from 1 to 5%. You should know what kind of deductible you already have so you are comparing like policies.
  • Safety and Security Measures: Upgrading the security in your home can result in up to a 20% discount on your premium, depending on your insurance company. If you have no alarm system, consider having one installed. If you have a standalone alarms installed, think about switching to a monitored alarm system. Having a deadbolt, door locks and window bars are options you may consider. Having smoke detectors, sprinklers, dead-bolt locks, and other security devices can also reduce your premiums. To get even more reductions join and participate in the local neighborhood crime watch program that is recognized by local law enforcement.
  • Discounts: Get your home insurance with the same company that provides your auto or life insurance. Of course, you have to balance the rates offered by other insurance companies to see if the switch would result in overall lower insurance premiums. There are also discounts available for new home owners, seniors, and those with good credit scores.
  • Renovations: If you make your home more disaster resistant you may qualify for some discounts. Storm shutters, a reinforced roof, and updated heating and plumbing systems can reduce the cost of your premium. Keep all receipts and documentation since your insurance company will lower your insurance premiums if you can prove that the roof is new and in good condition.
  • Other Options: There are some other personal factors that may affect your home insurance rates such as smoking, owning a certain breed of dog, having a trampoline or having a swimming pool in your backyard. But barring major life changes and unhappy kids you may want to use the ideas above to lower your home insurance rates. Finally, talk to your insurance provider to know if there are other options you may have overlooked since different insurance providers offer variations of the same discounts.

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