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3 ways to save on home insurance

By Kemberley Washington · Bankrate.com
Tuesday, May 28, 2013
Posted: 4 pm ET

Home insurance can be a major household expense. Insurers have taken big losses in recent years thanks to natural disasters. As a result, insurance premiums are increasing steadily.

As insurance becomes more expensive, it can throw your budget out of whack. But there are still ways to save on your homeowners insurance policies. Here are three:

Raise your deductible

One of the surest ways to reduce a homeowners insurance premium is to raise your current deductible.

Many of us hate the thought of having to pay a lot of money toward a claim, so we settle for low deductibles. However, since claims are relatively rare, low deductibles -- which typically lead to higher premiums -- usually do not make financial sense. Over the long run, those of us with low deductibles essentially are overpaying for our insurance policies.

If you have a low deductible, consider raising your deductible to an amount with which you are comfortable. Since higher deductibles lead to lower premiums, you can take the money you save and put it into a savings account. Tap that account if the unexpected happens and you need to meet your deductible.

Shop around

Until recently, I had the same insurance company for the last three years. After my insurance company repeatedly raised my premiums, I decided it was time to shop around.

After contacting several companies, I was able to find a reputable company and reduce my premiums substantially. Just make sure you choose an insurer that is financially stable and has a good reputation.

Inquire about discounts

Many insurance companies offer discounts that help you reduce the cost of homeowners insurance. For example, purchasing your homeowners and auto policies from the same insurance provider -- a process known as "bundling" -- can earn you a price break.

Your premiums also may fall if you make certain changes and improvements to your home, such as adding an alarm system or installing storm shutters. Talk to your insurance agent to determine which options are available to you.

Remember: your choice, your future!

Kemberley Washington is a certified public accountant and business professor. She writes a personal finance blog at Kemberley.com. Follow her on Twitter and on Facebook.
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