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Before you look for the absolute cheapest home owners insurance, make a short list of decent insurance companies. You can type "insurance company ratings" into any search engine and get some free information on the financial strength of the various companies. You want a company that is going to be around when you need them.
Then, call a company on the list or get a quote online. Ask a lot of questions, first, though. There may be ways to save money that you hadn't thought of, or aren't on the list below. Be sure that you understand what is covered and what isn't. Take notes, writing down the exact policy limits and deductible amounts and anything else relevant.
You are going to need this information to accurately compare the quote to others. What you are really looking for is not the cheapest home owners insurance, but the cheapest way to get the policy you need. With that in mind, here are some ways to lower that premium.
1. Have a higher deductible. Insurance is for disasters, not small stuff, so plan to pay the first $1000 someday when something happens. Meanwhile you'll save money every year. Does this make you uncomfortable? Here's a solution: If the annual premium is say, $80 less with a higher deductible, put that $80 into a special account each year. You'll eventually have the whole deductible covered, or if you have no claims, you'll have extra money for retirement.
2. Ask about a car / home discount. Usually you can get a lower rate if you car is insured with same company as your house. Note the exact criteria and limits for the auto policy, though. You'll want to fairly compare this part of the policy with others as well.
3. Get at least three quotes. Use your
notes to make sure that each company is quoting the same policy
limits, and roughly the same policy conditions, so you can honestly
compare the quotes.
4. Use independent agents. Because they are not limited to one
company, they can sell you policies from whichever companies
are cheapest, or best suit your needs.
5. Ask about special discounts. Non-smokers usually get a discount. You may get a discount for security alarms as well.
6. Make sure the home is safe. Whether
or not there is an inspection before the policy is issued, you
don't want to lie to get cheap rates. In other words, you really
should have smoke alarms, locks on the doors, a fire extinguisher,
and an updated furnace.
7. Check the coverage on contents. If you don't really have $40,000
worth of stuff in the house, don't pay for the coverage. When
the time for a claim comes, the insurance company won't pay for
value that wasn't there, but they will collect for it if you
let them.
In the end, you may never get a perfect comparison of rates. Some insurance companies won't have the exact same policies available as others. They may each have their own minimum content coverage
Copyright Steve Gillman. See the home he and his wife bought for $17,500, and get a Free Real Estate Investing Course at: http://www.HousesUnderFiftyThousand.com
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