Insurance premiums can increase, but what can you do about it?

A common phone call to one of our offices is that of either a current insured or someone looking for quotes who mentions that in the past 4-5 years their homeowner's insurance premium has increased dramatically.
I could explain all the differing reasons that the rates have increased but what people really want to know is, "what can I do to keep my premium as low as possible" so I would like to pass along some tips.

Get the Coverage You Need Without Paying More Than You Should

Have you noticed that the cost of your homeowner's insurance coverage has increased significantly over the last several years? Policies that cost $325 just a couple of years ago are often two to three times that amount now, putting the squeeze on many homeowners' budgets. Here are ten ways to minimize the cost of your homeowner's insurance.

1. Raise Your Homeowner's Insurance DeductibleYour deductible is the amount of risk you agree to accept before the insurance company starts paying on a claim. With the cost of homeowner's insurance escalating, it no longer makes sense to let the insurance company assume all the risk. If you have a low deductible of $50 to $100, consider raising it to at least $500 to $1,000. You could save up to 25% on your premiums. Some companies are offering deductibles equal to 1% of the insured value of your home ($1,000 deductible on a $100,000 home). It that seems like a lot of money to pay in the event of a claim, consider this: the trends in homeowner's insurance are for insurance companies to severely penalize customers who file one or more small claims. Often the premiums are jacked way up or the policy is cancelled, and when the customer looks elsewhere for coverage, they may find it costs them three times what they were paying. We should change our perception that insurance of any type is intended to cover all of our expenses when we incur a claim. Those days are over. Think of insurance as risk sharing. How much risk are you willing to assume?
   
2. Combine Your Homeowner's Insurance and Auto Insurance PoliciesConsider buying your homeowner's and auto insurance policies from a company that offers both. Some companies offer discounts of 5 to 15% if you buy both types of coverage from them. Check around and make sure the price is lower than buying the two policies from two different companies before making this move.
   
3. Ask About Other Homeowner's Insurance DiscountsMake sure you're receiving all the discounts for which you're eligible. For example, discounts exist for smoke detectors, deadbolt locks, security or fire alarm systems, fire extinguishers in the home, etc. If you're over 55 and retired, you may qualify for an additional 10% discount.
   
4. Don't Buy Homeowners's Insurance Coverage You Don't NeedIt makes no sense to buy insurance to protect yourself against risks you are unlikely to encounter; for example, earthquake coverage in a non-earthquake zone, or a jewelry floater to your policy if you don't own expensive jewelry.
   
5. Make Your Home a Better Insurance RiskAsk your insurance agent what you can do to make your home less expensive to insure. Making changes that reduce the risk of damage in windstorms and other natural disasters is one example. Another is updating old wiring or heating systems, which may reduce your risk of fires and therefore reduce your premiums.
   
6. Know What Your Homeowner's Insurance Policy CoversYour home is your biggest investment. Make sure it's adequately protected from risks you cannot afford to cover yourself and that it covers any home improvements you've made, major purchases, and increased costs of rebuilding.
   
7. Keep Your Insurance Coverages Up To DateOnce a year, before your homeowner's insurance policy is due to renew, dig out the current policy, read through all the details, and call your insurance agent to discuss any changes in your situation that occurred during the year.
   
8. Avoid Risks That Insurers ShunInsurers are shying away from some risks. For instance, owning certain types of dogs (Rottweilers, Doberman Pinschers, Pit Bulls), can limit or void your policy. Owning a swimming pool or a trampoline can increase your cost of coverage. Read all the fine print in your policy under the "Conditions and Coverages" sections so you know all the things that are excluded from coverage. You may opt to buy additional coverage to protect yourself from certain exposures.
   
9. Improve Your Credit ScoreInsurance companies are increasingly using credit information to price insurance policies. Don't have too many open credit accounts, don't charge close to the limits on your credit cards, and pay all your bills on time to keep your credit score healthy.
   
10. Shop Around for Homeowner's InsuranceShop around for homeowner's insurance rates but keep in mind that you may be receiving a longevity discount if you've been with your current insurer for several years. Typical discounts are 5% if you've been with the company for three to five years, and 10% for six years or more. Get quotes from three agents, and take any longevity discounts with your current insurer into consideration when you compare prices. Your state insurance department may have rate comparison information available for your state. See www.consumeraction.gov/insurance.shtml Before you switch insurers, check out their financial health at www.ambest.com or www.standardandpoor.com.
 

My advice is to speak with your agent; if you don't have a local agent, give one a call and dive into your situation.

Insurance agents typically get flack for their careers but are truly professionals looking out for the best of the client, if yours isn't doing so, it is time to find one who will!

But, just to show we have a slight sense of humor too, here is some at our expense!


A woman was in the hospital after feeling very ill. The doctor says to her, “I have some bad news for you. You only have three months to live.”
“Oh that’s terrible,” the woman sighs, “what am I going do?”
The doctor replies, “Marry an insurance agent.”
“Will I live longer?” asks the woman. ”
No,” replies the doctor, “but it will SEEM longer.”

Why go independent?

It became obvious to me today at our Saint Cloud Chamber Connection meeting that many times when I introduce myself I say that I am "an independent insurance agent working for Advantage 1 Insurance" and I realized it didn't sound that great and also meant very little to most people I tell! So, what do I mean by being and independent agent and what benefit is that to you the insurance customer?  Here is a great article that I felt explained it quite well!



Some people think it doesn't really matter where they buy their insurance. But this misconception could be costing them money, service and protection. Buying insurance isn't like buying bread or milk. Insurance is an important safety net for your family, your home, your car or your business. Don't treat the purchase lightly!

There is a difference in where you buy your protection. Many people don't realize there are three sources for insurance:

1.	Captive Agents, who can sell you the insurance of only one company.
2.	Telephone Representatives, who can offer you the insurance of one company, and only on the telephone.
3.	Independent Insurance Agents, who represent an average of eight insurance companies, and research with these firms to find you the best combination of price, coverage and service.

Your Independent Insurance Agent:

• Is a licensed professional with strong customer and community ties.
• Gives you excellent service and competitive prices because your agent can access the insurance coverage from more than one company.
• Unlike other agents, is not beholden to any one company; thus, you don't need to change agencies as your insurance and service needs change.
• Assists you when you have a claim.
• Is your consultant, working with you as you determine your needs.
• Offers you a choice of insurance plans and programs.
• Is a value hunter who looks after your pocketbook in finding the best combination of price, coverage and service.
• Offers one-stop shopping for a full range of products-home, renters, auto, business, life and health.
• Can periodically review your coverage to keep up with your changing insurance needs.
• Treats you like a person, not just another number.
• Customer satisfaction is the key to an independent agent's livelihood. So, serving you is your independent agent's most-important concern.

There Is A Difference!    

At Advantage 1 Insurance, we want to be YOUR agent, so give us a call and see what WE CAN DO FOR YOU!