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7 ways to cut your home insurance bill

With real estate values recovering and even reaching new highs in some areas, now may be a good time for people to take a fresh look at their home insurance and the amount of dwelling coverage in their policy. 

When you do this, keep in mind that the dwelling coverage limit in your policy should be sufficient to cover the cost of rebuilding a home and not be set at the approximate sale price of the home, which is likely to be a lot lower.  

If rebuilding costs in your area have increased, or you recently made improvements to your home and you haven't checked your dwelling coverage in your policy, then you may be underinsured. When you increase the dwelling limits of your home insurance, this will increase your premium.

So now is a perfect time to also make to take advantage of some money saving options. Just keep in mind that while many companies offer discounts, they don't all offer the same types of discounts or the same level of discount in all states. That's because states' insurance laws vary, so check with your insurer to see what they offer in your state. 

Here are seven of the most common discounts to look for in regards to your home insurance policy:  

Increase Deductibles: If you increase your policy deductible to $1,000, you can save about 20 percent on many home insurance policies. Some home insurance policies allow you to raise the deductible to as high as $25,000 (and $10,000 for tenants) for even larger savings. In many states, separate deductibles are also available for windstorm and hail losses. Since on average a homeowner only files a claim every couple of years, increasing the deductible seems to be a good way to save money while taking on a limited amount of risk.

Safety Discounts: Most home insurers offer at least a 5 percent discount when your home has features such as a smoke detector, burglar alarm or dead-bolt locks. Some companies may offer discounts of as much as 15 or 20 percent if you have a fire and burglar alarm that connects to a central monitoring station. Some insurers offer additional discounts if your home has a sprinkler system over the kitchen stove.

Water monitoring systems that detect leaks and automatically shut off water systems can also qualify your policy for additional discounts. But these systems come at an additional cost and not all of them will qualify for a discount. Before you buy, find out what your insurer recommends and how much the device would cost versus how much you'd save on premiums.

Multi-line Discount: Most insurance companies that sell home insurance also sell auto and excess liability insurance. An excess liability policy provides additional liability coverage over and above what is included in your auto and home insurance policies. Many companies will reduce your premium by 10 percent to 15 percent if you buy two or more insurance policies from them. But make certain the the total cost of buying the policies from one insurance company is less than buying the policies separately from different companies.

Four More Discounts: 

  • Sign up for e-policy and e-bill delivery -- some companies may offer a premium discount. In addition, if you sign up for automatic payments and pay the full premium, your insurance company may offer a "Paid in Full" discount of up to five percent.
  • If you're at least 55 years old and/or retired, you may qualify for a discount of up to 10 percent at some companies.
  • If you've done a renovation that includes new or significantly updated plumbing or electrical systems, then let your insurance company know and they may offer a discount.
  • You may also receive a discount if your house is located near a fire hydrant or in a community that has a professional rather than a volunteer fire department.
Finally, when considering any home improvements, before you get to far along into the project, ask your insurance company what upgrades can be made to qualify for additional discounts. You may qualify for discounts on your premiums by adding storm shutters, shatter-proof glass and reinforcing your roof, especially in locations where wind and wind driven rain storms are more likely. Also consider installing the newer tankless hot water heaters, which reduce the risk of a leaking water heater due to a corroded tank. 
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