Many insurers have been raising rates to make
up for losses they suffered during the financial
crisis, industry experts say. At the same time,
insurers are competing hard for new customers,
which means some of them are cutting better deals
for new policy holders than for existing ones,
says Deeia Beck, executive director of the Office
of Public Insurance Counsel, a state consumer
agency in Texas.
When your annual renewal statement lands in
your mailbox, check InsWeb.com and NetQuote.com to
see if you can snag a better deal elsewhere.
Consider moving your auto policy too; bundling
home and auto coverage with the same insurer can
cut your total premiums by 5% to 15%.
2. You may have too much
It's common for policies to contain
inflation-protection provisions that automatically
increase your coverage amount. "In most years,
that's a good thing," says Scott Richardson,
director of the South Carolina Department of
Insurance. Now that construction costs have
fallen? Not so much.
For now, pass on inflation protection and
adjust your coverage amount to a more realistic
figure. Lowering replacement value from, say,
$300,000 to $250,000 might shave 10% off your
3. A bad rep can cost
Just as lenders check your credit history
before figuring out what rate to charge you,
insurers tap into national databases such as the
Comprehensive Loss Underwriting Exchange (CLUE) to
see what claims you've filed in the past. Those
records can be full of errors, warns Doug Heller,
executive director of Consumer Watchdog, an
insurance advocacy group.
Check your insurance report for mistakes at
choicetrust.com; it's free if you've been denied
coverage ($19.50 otherwise).
4. Small claims can cost you,
Go with the highest deductible you can afford
and bank the savings to cover the cost of minor
repairs. Filing a claim for every broken window or
leaky pipe can drive up your premiums by 10% to
15%, says Don Griffin, a vice president at
Property Casualty Insurers Association of America.
(Some experts say that even inquiring about making
a claim can raise a red flag.)
Increasing your deductible from, say, $500 to
$1,000 can lower your annual premium by as much as
25%, according to the Insurance Information
5. A home's history
In the market for a new house? It may seem
unfair, but claims associated with the property
before you buy it can result in your paying more
than you would otherwise. "Certain locations [such
as those vulnerable to flooding] may be more prone
to claims," explains Kiran Rasaretnam, CFO of
To get info on past claims, ask for a copy of
the seller's CLUE disclosure report (see No. 3).
Yes, you're stuck with the history of the house
you buy, but you can use what you find to
negotiate a lower price with the seller.