Getting low cost Homeowners and Renters Insurance
As with all insurance coverage, the first step in purchasing homeowners or renters coverage should be shopping around for the best deal. If you already have an auto insurance policy, start by calling that agent or insurer for a home owners insurance quote—often you'll get a discount by purchasing both coverages through one company. Then make at least three more calls for quotes, including one to a direct writer—an insurance company that uses an 800-number-based sales force, like Amica (800-242-6422). Or, if you have a military connection, call USAA (800-531-8100). You should also call at least one insurer with its own sales force, like State Farm or Allstate, and one independent agent, who can quote you a variety of prices. And, of course, you'll want to check the ratings of the insurance company with a firm like A.M. Best or Standard & Poor's.
Discounts abound, but you have to know to ask for them. Here are some places where you can save significant money:
- Raise Your Deductible. Increasing your deductible from $250 to $1,000 can save you as much as 25 percent, according to the Insurance Information Institute.
- Buy smart in the first place. New homes made of materials that aren't likely to burst into flames can net you a discount, as can brick homes in some parts of the country (because they're less likely to suffer damage from hurricanes) and frame houses in other parts (because they're less likely to succumb to earthquakes).
- Overlap your policies. When you switch insurers, the new insurer can drop coverage on you in the first 60-90 days. so make sure you hold on to the old one, until that "break in" period expires.
- Stay Safe. Get a burglar alarm and you could save at least 5 percent on your annual premiums. Other safety devices, like smoke alarms and state-of-the-art deadbolts, can also net you discounts.
- Stay home. If you're home more often than not, you ought to be able to save 5 percent to 10 percent on your homeowners policy. The logic: You're less likely to be burgled and more likely to notice small fires or other problems. Note: The same is true if someone else is typically home—if you have a live-in housekeeper, for example.
- Membership pays. Belonging to certain alumni or automobile associations may result in a discount.
How much Insurance do you need?
Do you have enough insurance coverage in the case of theft? How about flooding? Or earthquakes? In reality, most homeowners — some 64 percent in 2003 — are underinsured.
According to the Insurance Information Institute, you need enough coverage to insure the structure of your home, cost of living expenses (in case you're forced out of your home), all of your personal possessions, and potential liabilities to others.
What Doesn't my policy cover?
Most disasters are covered under the typical homeowner's policy, but you'll need separate insurance in the case of floods or earthquakes
