5 Ways to Save on Your Homeowner’s Insurance
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The Fiscal Times
August 14, 2014

The quality of your credit affects in a big way how much you pay for homeowners’ insurance, to the point that in the majority of the U.S. states, consumers with poor credit pay at least twice as much as people with excellent credit.

Maintaining a good credit history can lead to several hundred dollars in annual homeowner’s insurance savings, according to a new report from insuranceQuotes.com.

“Your credit score is a huge part of your homeowner’s insurance rate,” said Laura Adams, insuranceQuotes.com’s senior analyst.

Related: Credit Score Change Could Set Up Consumers to Fail

She noted that credit plays a large role in the initial quote you receive from your insurance company, although some states such as California, Massachusetts and Maryland prohibit insurers from using credit scores to calculate homeowner’s insurance premiums.

Whether your credit rating is improving or deteriorating also influences your insurance premiums down the line; it’s always a good idea to ask your insurer to review your rate if you know your credit score has improved.

There are other ways to lower your home insurance premiums. “It’s a very competitive market place with many providers, so it’s important to work with someone who understands the appetite of insurers,” said Peter Schapero, a partner with The Signature Group of Cos., an insurance agency on Long Island.

Here are five additional ways to lower your homeowner’s insurance:

Shop the policy on a regular basis. Rates may have dropped in your area or your credit quality may have improved, so it’s always worth shopping around for lower rates at least once a year. “Don’t get too comfortable with your current insurer and see what competitors would quote you for a new policy,” said Adams.

Install a new security system. Let your insurance company know that you’ve installed a security system. If it’s tied to the local police department, you should benefit from a lower rate. “The savings on your insurance might even pay for the security system over time,” said Adams. Schapero added that something as simple as keeping your valuable jewelry in a vault or having a full-time live-in caretaker who would catch a catastrophe early, minimizing damages, can also lower your insurance premiums.

Put a new roof on your home. Same goes for major improvements to your home such as installing a new roof, new windows or new shutters on your windows. “Anytime you do remodeling, it can qualify you for a discount,” said Adams, adding that depending on your insurance company, you can shave 10 to 20 percent off your existing rate.

Related: The Hidden Threats from You ‘Smart’ Home

Buy a home near a fire hydrant or a fire house. This is mostly for people moving to a new house or if there’s a new fire house being built near you, but know that insurance companies always look at how far your home is from emergency facilities. “Fire is a major disaster that causes a large amount of claims and expensive ones,” said Adams.

Don’t get a black-listed dog. You won’t save on your insurance, but at least you’ll avoid a rate increase if you don’t pick a dog breed blacklisted by your insurance company. They typically include Rottweilers, German Shepherds and Pit Bull Terriers, but it’s better to ask your insurance company for a list since it can vary from one company to the next. “There are some breeds of dogs with a reputation for being aggressive that insurers don’t like to see,” said Adams.

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Marine Cole has been covering finance and business for a decade and has written for publications that include The Wall Street Journal, Crain's New York Business, and AdvertisingAge.