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Keep your insurance premiums to a minimum

July 29, 2014

There are many elements that go into calculating the annual premium of your home insurance policy.

While the value of your home is a major component—as more expensive homes require a larger premium—the location of your property is also a driving factor, with insurance premiums differing greatly from one region to the next, according to Investopedia?.

Upgrades to your home could reduce your insurance premium.
But sometimes the rising costs can be traced back to inflation. According to a report from the Insurance Information Institute, the annual insurance premium climbed from $668 in 2003 to $978 in 2014. Investopedia reported that most analysts are predicting the cost to insure your home will continue to ascend. Here are a few tips to keep insurance costs to a minimum:

Confirm the value of your home

When it comes to the price of your home, if you take the word of your insurance agent, you might be paying too much for coverage you don't need.

“Obtain a licensed property appraiser's report to ascertain the current value of your home, and then shop for quotes to learn what policies are available to you and what additional other coverages can be added to the policy,” Leigh Needelman, an insurance agent in Florida, told Investopedia.

The appraiser's report might be less than what your insurance agent claimed, which could lower the cost or help you wipe out some coverage that you don't need.

Consider discounts and credits with your policy

Eric Stauffer, president of ExpertInsuranceReviews.com, told Investopedia that discounts and credits offered by your insurer can help lower the your monthly costs. However, the obstacle is that your insurer might not advertise these discounts, meaning that you'll have to ask for them.

Record any home improvements or upgrades that you've installed, such as a security system, new roof, or doors and windows, that improve your home's wind resistance and storm-proofing measures.

“Some companies have credits for complete upgrades to plumbing, electric, heat and roof,” insurance agent Billy Van Jura told Investopedia.

The Post and Courier reported that homeowners should make sure to let their insurance agents know if their home was built in 2008 or later, as those homeowners can earn discounts for meeting modern building codes.

If your home has a hip roof—a pyramid-like roof that angles downward on all sides—an insurer might be able to offer a discount because hip roofs are more resistant to hurricanes and gusting winds than a standard roof.

Shop around for the right policy

Each insurance company will have its own set standards and criteria when it comes to setting premiums and writing policies. Shopping around for the right plan can save you a bundle.

Homeowners hoping to land an affordable home insurance policy should consider the offerings from SelectQuote Auto & Home. SelectQuote provides comparison shopping from a dozen of the nation's top insurers to find you the perfect plan for your home. Every insurance company represented by SelectQuote has been meticulously chosen to provide favorable rates and excellent auto and home coverage.