Reducing Your Homeowners Premium

| August 9, 2007

Sometimes looking in the mirror, assessing your situation and making a few much needed changes can help to lower your homeowner insurance rate.

Reducing your homeowner insurance rate consists of three factors:

  1. Insurance company underwriting guidelines
  2. The condition and maintenance of your home, and
  3. Your personal, individual risk factors.

Once you have become familiar with your insurance company’s philosophy and underwriting guidelines, and understand how home management can either increase or reduce your premiums, it’s time to concentrate on what you can do as an individual to reduce your reduce your homeowners insurance rate. As a matter of fact, the tips for self-improvement listed below will help reduce your insurance rate no matter what type of insurance your looking to purchase.

Making these changes will not only help you with insurance your homeowners insurance rate, but it will trickle over and make improvements in your business and personal life. These are items within your control and only you can make the changes as follows:

Improve Your Credit:

Not only does your credit have the ability to affect your homeowners insurance rate, in some states it may be a deciding factor as to whether or not an insurance company is willing to insure you.

The school of thought with credit rating and insurability is that there is an inverse relationship between a person’s credit and the number and severity of claims submitted. It has been proven that individuals with poor credit (which consists of, many delinquencies, judgments, improper debt to income ratio, too much credit and too many inquiries) are the same individuals who are most likely to file insurance claims. Conversely individuals with good credit are the ones least likely to submit claims.

In some states, insurance companies can only use your credit as a means to determine whether or not they will insure you. In other states, companies are allowed to use it as a rating tool to determine your premium rate. It is recommended that you check with your state’s Department of Insurance to see how your credit can be used.

Quit Smoking:

This seems to be a no brainier when it comes to life and health insurance, but did you know that smoking households pay more for homeowners insurance than non-smoking households? Non-smokers can take advantage of the ‘smoke free’ credit offered by most insurance companies.

Smoking is a leading cause of house fires. Unfortunately, the older the individual gets, the likelihood of a house fire increases. Smoking has been linked as the leading cause of house fire deaths in the elderly population.

By dropping the smoking habit, you can save on your homeowner’s insurance premium and potentially save your life.

Now that you have a better understanding of how to get the best possible rate for your homeowner’s insurance coverage, you still must shop around and compare coverages and premiums.

Tags: , ,

Category: Homeowners

About the Author ()

Felicia A. Williams is a wife, mother, freelance writer and owner of Tidbits About Money.

Comments are closed.