Premium

Homeowners insurance provides coverage in the event of damages or losses to one's home or personal property should a devastating event, like a fire or hurricane, occur.

To ensure that a plan remains active and coverage is available if necessary, the policy holder will need to pay a premium. This can be paid on a monthly, quarterly, bi-annual or annual basis.

Over the years, the average costs have increased. In 2006, the national average for a premium was $804, according to the National Association of Insurance Commissioners. Fortunately, there are several ways that policy holders can bring their costs down.

Easy Ways to Lower Your Rates

Here are four simple ways in which you can lower your rate:

1. Shop Around or Stay Put

   Depending on how long you have been with a particular company, it might benefit you to either shop around or to stick with what you have. If you have been with your provider for a short time, you might be able to find more affordable coverage by contacting multiple agents and comparing rates.

   However, if you have been with your carrier for a few years, you should contact your current agent to make sure that you are not missing out on any loyalty discounts. Often, companies will offer a 5 percent discount if you have been with the company for three to five years. Some providers even offer a 10 percent discount after six years of being with the company.

2. Raise Your Deductible
   • $1,000 deductible = 24 percent savings
   • $2,500 deductible = 30 percent savings
   • $5,000 deductible = 37 percent savings

   Some have very low deductibles but these low deductibles translate into significantly higher costs. While these policy holders might believe that they are being responsible by covering any cost that should arise, typically if they do the math, they will find that the high premium far outweighs any potential benefit from not having to pay for anything.

   Instead, you should consider raising your deductible to at least $500 if not higher. A typical deductible on a policy is $250. If you raise that deductible to $500, you could save up to 12 percent on your premiums. Raising your deductible even higher will save you even more money.

3. Combine Your Homeowners and Auto Policies

   Most individuals will have a homeowners and an auto policy. By combining the two plans with the same carrier, you could receive a discount ranging from 5 percent to 15 percent.

4. Increase Security of Your Home

   Policy holders often can get great discounts on their plans by making their dwelling more secure. Installing fixtures such as deadbolt locks, burglar alarms and smoke detectors could each result in a 5 percent discount. Some companies also offer discounts ranging from 15 percent to 20 percent if the resident installs a sophisticated home-security system, like an alarm system that connects directly to the police or fire departments.