Insurance Information Institute: How can I save money?
FULL TEXT (Rev. 11/07)
Ohioans continue to pay some of the lowest homeowners insurance premiums in the US. Ohio’s 2004 average premium expenditure is 6th lowest in comparison to other states and Washington DC, according to a 2007 National Association of Insurance Commissioners report.
The Ohio Department of Insurance (ODI) reports that Ohio’s top 10 homeowners insurance writers in Ohio decreased premiums by 0.8% in 2006. The top 10 writers represent just over 71% of Ohio’s homeowners insurance market. The top 10 Ohio writers reported a 0.4% increase in premiums in 2005 and a 2.2% increase in 2004.
You can take measures to help keep premiums even more affordable.
- Shop around. Contact several insurance companies and agencies to discuss coverage, costs, claims handling and service. Check company financial ratings for stability. Ask others for recommendations and use the Web for reviewing potential insurers.
- Protect your home against typical perils.Routine maintenance helps prevent claims, a leading cause of premium increases. These include:
- Keep fire extinguishers in fire-prone areas such as the kitchen and laundry.
- Update plumbing, heating and electrical services to reduce the risk of fire and water damage.
- Regularly check your roof, down spouts and pipes for clogs or leaks.
- Discourage crime by using exterior lights at night and deadbolt locks.
- Repair loose railings, steps or walks.
- Raise your deductible. By raising your deductible, you’re responsible for smaller losses, lowering your premium and chances for frequent claims. Consider at least a $500 deductible. A $1,000 deductible will save you even more.
- Ask about discounts. Some companies provide discounts for new construction, since newer homes are built to updated codes. Some insurers offer discounts for monitored home security systems. If you’ve had your home insured with the same company or agency for several years, you may also be eligible for an additional discount.
- Review policy annually. Update your coverage based on major purchases or recent home improvements. Double-check how far your home is from a water source such as a fire hydrant as well as the location of the nearest fire station. If you carry a policy endorsement on an item that’s depreciated, reduce or eliminate the endorsement to save.
- Buy all insurance from the same source. Some insurers will reduce premiums 5–15% by using them for all your insurance needs.
- Check on group coverage resources. Check with employers, alumni and professional trade groups who may offer insurance packages at competitive rates.
- Don’t insure your land. Although it’s part of the market value, it isn’t at risk for insured losses such as fire, theft, hail or wind. No need to include it in your coverage as you’ll end up paying a higher premium.
- Opt for guaranteed replacement cost. Although more expensive, it could save you money in the event of a major loss. A “replacement cost” policy pays to replace the damaged property or loss, regardless of its age and condition, with materials of similar kind and quality. An “actual cash value” policy provides reimbursement at the depreciated value.
- Contact the Ohio Department of Insurance for a shopper’s guide to homeowners insurance. It’s a good resource for general information, including average premiums by company. Download at: www.insurance.ohio.gov/Consumer/OCS/CompleteGuides/CompleteHomeGuide.pdf.
- Avoid frivolous claims. Submitting a claim after years of paying premiums is justifiable, but frequent claims may mark you as a high risk. Pay for losses that are close to your deductible.
- Protect home business operations. Don’t assume automatic coverage. Protect special home business risks by endorsement or a stand-alone commercial policy.
- Stay with your insurer. Some insurers reduce premiums by 5% after three to five years, and up to 10% if you remain a policyholder longer.
- Keep tabs on your credit. An insurance score is a snapshot of your insurance risk based on information in your credit report. It reflects your bill payment patterns over time, with more emphasis on recent information. Many companies take insurance scores into account when assessing homeowners insurance risk. For a fee you can access your insurance score information online at www.choicetrust.com. To improve a score: Pay bills on time, keep balances low on credit cards, and apply for and open new credit accounts only as needed. Review your credit reports annually to check for inaccuracies. If you find errors, notify the corresponding credit bureau.
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
- Click here for more information on ordering credit reports and related consumer tips.
- Make insurance part of the homebuying process. Choosing a home less prone to natural disasters or fire can mean a significant savings. For more information, see the new homebuyer’s insurance checklist.