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June 26, 2009

Inside Insurance: Tips to save money on homeowners insurance

What does it take to save money on your homeowners insurance at a time when every penny counts?

The first thing we usually say is raise your deductible because the more risk one shares with the insurer, the less the cost of coverage. However, there are many other ways to work with your insurer to decrease your risk and save money.

One of the most effective is to not only have a functioning burglar alarm system but to make sure the system includes smoke detectors to quickly detect fires. Just adding smoke detectors in your home can qualify for a 5 percent discount or more.

A good alarm system can save lives and most likely qualifies your home for a discount from your homeowners’ insurer. If you can spend money to save money, more sophisticated systems including fire sprinklers can bring a 15 to 20 percent discount, but before buying high-end systems, check with your insurer to know exactly what discounts would apply and how much can be saved.

Another possible discount to reduce your annual cost is to stay with your insurer for at least three to five years. Additionally, if you have multiple policies with the same insurer like auto and homeowners, life or umbrella liability you could save between five and 15 percent.

Here’s one that is becoming more important as the population ages. Those who retire or are close to retirement age can enjoy yet another benefit. For retired homeowners 55 or older, check with your insurance agent about a discount of up to 10 percent from some insurers.

A major step to obtaining the lowest cost of homeowners insurance is to talk with your agent or company and make sure that you are receiving as many discounts as your insurer has to offer.

That is one reason why homeowners are encouraged to talk with their agent or company annually or at least every two years. Keep in mind it is the homeowner’s responsibility to keep up with the various coverages, available discounts and options. This is the heart of being an informed consumer.

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