North Carolina Personal & Business Insurance
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Ten Ways to Save Money On Your Homeowners Insurance

DHB Insurance | June 2011

Homeowners Insurance rates in NC are going to increase for everyone. Recently, insurance companies have been paying out $122 in claims for every $100 they collect. Something has to give. These tips can help you keep your insurance premium low without sacrificing needed coverage.

1. Avoid Small Claims

Now more than ever, insurance companies will either charge additional premium or refuse to cover a risk with losses. Think of your homeowners policy as a catastrophy policy. If you turn in a few small claims, you could end up paying much more for your insurance.

2. Take a Higher Deductible

Insurance companies are offering substantial credits for policies with high deductibles. Take a look at pricing options for $1,000, $2,500 or higher deductibles. You may find the savings are well worth the additional risk.

3. Check Your Valuation

The insurance company may have been adjusting your dwelling value every year to account for inflation. Their methods are not perfect. Occasionally values can get higher than necessary, especially when a market downturn is factored into the equation.

This coverage amount is often misunderstood and it is important to keep in mind that the dwelling amount is not the home's market value. This is the cost to rebuild your home on land you already own. Much of a home's value is in other factors such as location/land. A small home in a desireable part of town can have a replacement cost much lower than the market value. Many people who purchased their house for a deal are now seeing that it would actually cost more to rebuild the home than they paid for it. It is important to make sure that you have enough coverage to rebuild your home, but limits above your needs provide no additional benefit.

4. Discounts

A number of carriers talk about discounts. Many of them are so small it is hardly worth a phone call to see if you qualify. There are a few that you should keep in mind.

a. Multi-Policy Discount

If possible, you need to have your home and auto insurance with the same carrier. The home/auto discount is one of the biggest available. It will also make an insurance company less likely to nonrenew your policy if you do have a loss on your home.

b. Alarm System

You can get a credit even if your alarm system is not hooked up to a central station. Be sure you are getting a credit for any local or central station alarms you have installed.

C. Pay Plan

If your homeowners policy is not paid out of escrow, you may be able to save money by paying annually rather than monthly or quarterly.

5. Check to Make Sure You Still Need the Optional Coverages

As your life changes, your insurance needs change. You may have needed a coverage at one point that you no longer need. Talk to your agent to make sure your coverage still fits your needs. We send out a mailer that helps check over the most common issues. Be sure to send it back when you get it.

6. Keep Your Jewelry/Scheduled Items Current

If you have items scheduled, you need to keep up with it. We often find that people have been paying for insurance on items they no longer own or the values are so old that keeping it insured at that level is not going to allow them to come close to replacing the item.

7. Check Your Credit Report

Your premium is tied to your credit and can make a big difference. Check your credit to ensure that the information being used is correct. A mistake could increase your premium.

8. Updates

Insurance companies want to know about updates done to your roof, HVAC, plumbing and electrical systems. That old roof may be costing you.

9. Shop Around

If we do not feel your insurance rates are competitive, we can check with our other markets. Changing companies is often a good bit more time consuming than the other options, but we can help you handle things with both insurance companies and make the process as smooth as possible.

10. Don’t Dump the Important Coverages

It is always possible to offer savings by offering less. There are a few optional coverages we do not recommend cutting.

a. Replacement Cost Coverage on Contents

The standard policy comes with coverage that will pay you for the value of the item you lost rather than the cost to replace that item. If you want to know how much your clothes are worth, check the thrift store.

b. Lower Liability Limits

Liability coverage is inexpensive. Lowering your limits by a few hundred thousand may only save you a few dollars.

c. Backup of Sewer & Drain

This optional coverage is getting expensive. This is due to an increased number of claims. If you find yourself with a house full of "black water" that came up from the sewage lines, you will not be as pleased about the $35 you saved.

Our posts are written in house based on questions we receive from our customers and current issues with NC Insurance. Follow us online to see more tips in the future. [Facebook | Google+ |Twitter | Linkedin]

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