How to Protect Your Home in Rhode Island

After Hurricane Katrina hit New Orleans, many coastal homeowners in Rhode Island and other east coast states found themselves with higher insurance rates, substantially higher deductibles, or no coverage at all when many carriers dropped their coverage of coastal areas.

Many homeowners assume their deductibles are based on a percentage of each claim filed. However, in an increasing number of cases, they are based on a percentage of the insured value of the house. For instance, if a $500,000 house with a five percent deductible receives $25,000 in storm damage, the policy would not cover any part of the loss because the deductible is applied to the house's value, for a total of $25,000, not the loss, where the deductible would be $1,250.

Legislators in Rhode Island have introduced two new bills designed to help residents suffering in this situation, one of which will keep providers from canceling or non-renewing policies based, for the most part, on location.

Rhode Island premiums rank as the eighth most expensive in the nation. But don't despair. While you can't control some factors, you can do some things to lower your rate.

If you have not yet purchased your home, keep these things in mind before you buy, and you can save money:

• Home Disclosure Report - if the place you are looking at is in a high crime area or has a history of flooding, the rates will be higher. So make sure you get full disclosure before you buy.
• Fire and Flood - the farther your dwelling is from the nearest hydrant and the longer it takes the fire department to respond can negatively affect your costs. Also, obviously, living in an area prone to floods will cost you as well.
• Age and Construction - the older your dwelling is, the more it will cost to insure. This is because, as building materials age, they become less stable, and the residence is more susceptible to damage. Getting a brick house rather than wood can save you money.
• Electrical and Plumbing Systems - newer systems aren't as apt to fail, so some providers will give you a discount for buying a new place.

Here are some other factors that can help (or hurt) your rate:

• Credit Score - rightly or wrongly, if your credit score isn't so great, you will have higher costs.
• Multiple Policies - you can get a discount for buying your homeowners policy with the same company that insures your car.
• Security - deadbolts and an alarm system can bring you a discount on your premium.
• Senior Citizen Discount - if you are 55 or older, you can get a discount because companies believe seniors have more time to perform maintenance, and since they do not have to leave the house to work, they would notice a fire more quickly than a younger, working adult.
• Don't Smoke - where there's smoke, there will often be a fire, so if you don't smoke, you're likely to get a discount.

Ask your agent if you can do other things to lower your rate.