Homeowner's Insurance

The typical American homeowner will pay approximately $615 for homeowners insurance in 2004, $46 more than he or she paid in 2003. Rising construction costs for repair and replacement of homes and increasingly expensive natural disasters are the primary reasons for the increase in premiums. What can you do to save money on your homeowners insurance policy? Consider these tips from the Insurance Information Institute.

Raise your deductible.

The deductible is the amount of money you are responsible for paying toward a loss before the insurance company starts to pay a claim. Deductibles on homeowners policies typically start at $250. However, if you double that deductible you could save up to 12 percent on your annual premium. Raise your deductible to $1,000 and you could save as much as 24 percent.

Buy your home and auto policies from the same insurer.

Some companies that sell homeowners, auto and liability coverage will give you a 5 to 10 percent discount on your premium if you buy two or more policies from them.

Consider insurance when you buy a home.

The price you pay for homeowners insurance depends on how much it will cost to replace your home and the likelihood it will burn down or be damaged by a natural disaster. The chances of your getting a break on your insurance are better if you buy a home with electrical, heating and plumbing systems that are less than 10 years old. Your insurance may also be cheaper if your home is close to a fire hydrant and is located in a community that has a professional rather than a volunteer fire department.

Improve your homes security and safety.

Ask your agent how much you'll save if you install simple safety devices like smoke detectors and dead-bolt locks. By installing a sophisticated sprinkler system and a fire and burglar alarm that rings at the police station or other monitoring facility, you save as much as 15 to 20 percent on your annual premium.

A system like this can come with a hefty price tag. Before you make such a purchase, find out what kind your insurer recommends. Then determine how much the device would cost and how much you'd save on premiums.

See if you can get group coverage.

Alumni and business associations often work out an insurance package with an insurance company, which includes a discount for association members. Ask your association's director if an insurer is offering a discount on homeowners insurance to you and your fellow graduates or colleagues.

Make your home more resistant to disasters.

You may be able to save on your premiums if you make your home more resistant to disasters. Ask your agent what kind of discount you can get if you install storm shutters and shatterproof glass, and reinforce your roof, or replace it with stronger materials.