Just as with real estate values, location rules when it comes to homeowners insurance costs.
From the most expensive state to the cheapest, home insurance premiums vary by more than $1,000 per year. According to the National Association of Insurance Commissioners, the average annual U.S. premium was $822 in 2007, the most recent year for which figures are available. Floridians paid the highest rates, averaging $1,534 a year, while at the opposite end of the spectrum, homeowners in Idaho paid $422.
Fortunately, you can take several steps to bring down the cost of your own homeowners policy, short of packing up and moving.
Raise your deductible
You can shave as much as 25 percent off your premium by raising your deductible from $500 to $1,000, according to the Insurance Information Institute.
“Most homeowners have a $500 deductible,” says Shaun Adams, whose Raleigh, N.C., insurance agency is an Erie Insurance affiliate. “We’ve moved a lot of our clients to a $1,000 deductible, because usually they won’t file a claim anyway unless there’s something large.”
Get a multipolicy deal
The Insurance Information Institute estimates that buying two or more policies from the same carrier can save you 5 percent to 15 percent. But do some comparison shopping to be sure that combining your homeowners insurance purchase with your auto, life or umbrella liability policy really does add up to a lower total than you would get if you bought them from different companies.
Make some home improvements
You can lower your premium by getting a new roof, changing your heating, electric or plumbing system, or adding new safety features such as an alarm system. Even putting a fence around that backyard trampoline or swimming pool — or getting rid of it altogether — can get you a lower-cost policy by lowering your claims risk in the eyes of your insurance company.
Just be sure to let your insurance agent know when you’ve upgraded. “A lot of times customers install alarm systems in their homes, but they never tell us,” Adams says. “Depending on the carrier, you can get anywhere from 5 percent to 15 percent off annually on your home insurance.”
Keep your credit score up
Many carriers use insurance scores, numerical rankings based largely on credit history, in their determination of rates. Erich Held, an agent with Farmers Insurance Group in Chicago, says that while your insurance score also includes other factors, such as how long you’ve had insurance, good credit goes a long way toward keeping your homeowners insurance affordable.
“It’s safe to say that people who have a better credit rating overall end up receiving a better insurance score,” Held says.
Review your policy regularly
Your annual renewal period is a good time to review your policy to make sure it contains accurate information about the size and construction of your home. Update your agent about any significant changes affecting the home and its surroundings.
For example, if you live in a rural area that was recently incorporated into a town that offers municipal fire protection, you can save as much as 60 percent to 70 percent off your premium, according to Adams.
Make sure that you are taking advantage of all available discounts and that none of those you already have need to be recertified, Held suggests.
If you are shopping for a new policy, the Insurance Information Institute recommends getting at least three price quotes. You can call several insurance companies directly, use online premium comparison sites or check out price information available through your state insurance department.