Home insurance rates are on the rise. According to data collected by the Insurance Information Institute, the average home insurance annual premium has jumped from $668 in 2003 to the current national average of $978. Analysts expect the cost to insure your home will continue to inch upward, putting a strain on your budget.

Your home is more than just a place to live. You work hard for your valued possessions, so it only makes sense to properly protect them. But pricey home insurance doesn’t have to be a foregone conclusion. You can find affordable rates with these little tricks.

Verify Your Home's Value

Guessing about your home’s value, or taking the word of your insurance agent or broker, can lead to paying too much for coverage you don’t need, or purchasing a policy that leaves you at risk of being under-insured.

“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,” says Leigh B. Needelman, agent, CEO and president, Florida Assurers, Inc. in Miami Beach, Florida.

Shop Around

Home insurance companies each have different policies and criteria for underwriting and setting premiums. And those criteria can vary quite a bit, says Billy Van Jura, an independent insurance broker in Poughkeepsie, NY. “The main drivers of the cost are your credit score, followed by where the home is located in relation to a fire hydrant or fire station. Then factors including how the home was constructed and prior claims filed by the homeowner are factored in.”

Van Jura says, as a rule, once you know the value of your home, get at least three estimates to compare. Just make sure to diversify.

“It’s wise to consider two different brokers who can provide quotes from various home insurance companies and one captive agent, who represents one specific company,” says Van Jura. “Two brokers is recommended because some have different carriers and a captive because there is likely one in your neighborhood who knows the area.”

While comparing quotes, make sure to ask about fees.

“A broker licensed to sell for multiple companies often attaches their own fees to policies and policy renewals. This could cost hundreds extra a year simply by using them over a captive agent,” says Eric Stauffer, president of ExpertInsuranceReviews.com.

Brag About Your House

Stauffer says discounts and credits can help lower the cost of home insurance. However, you might have to ask for them.

Make a list of home improvements and upgrades like a new roof, security system and alarms, as well as doors and windows that increase the home’s wind resistance and other storm-proofing measures.

“Some companies have credits for complete upgrades to plumbing, electric, heat and roof,” says Van Jura. Discounts or credits and their value will vary per company.

Get in the Correct Class

All homes are located in a specific protection class that rates the distance to fire departments and hydrants, fire protection staff (volunteer or paid) and geographic distribution of firefighting companies, says Dario Campolattaro, CEO, Kelly Insurance Agency in Leesburg, VA. Fire alarm and communication systems like 911 and water supply (including the condition and maintenance of hydrants) also factor into your home’s protection class.

“When shopping for quotes, be sure to discuss the location of your fire department and the distance to the nearest fire hydrant in order to ensure your home is placed in the correct protection class and you receive the proper policy rating,” says Campolattaro.

Compare Apples to Apples

Once you know what coverages are most important to you, make sure you compare apples to apples.

“Compare all the different quotes for the same coverage to insure you get the coverage that best matches your risk tolerance,” says Needelman.

You have to look at deductibles, coverage limits and exclusions. You should also compare satisfaction ratings for the home insurance company available via the National Association of Insurance Commissioners, J.D. Power, A.M. Best and Weiss Research, as well as any complaints filed against the company with your state’s Department of Insurance.

Then determine which of the companies has the lowest premium for the same coverage. This is the best way to obtain the optimal home insurance quote. Your policy must protect all your important tangible assets, and provide a deductible that you can afford in the event of a loss.

“You should never purchase insurance based on the lowest premium,” Needelman adds.

There are two types of consumers for insurance policies: the price cutter and the cost cutter.

“The cost cutter offers good overall coverage, but at the lowest premium,” says Needelman. “Whereas the price cutter, which often includes a very high deductible, does not care about the coverage as long as the premium is the lowest.”

The Bottom Line.

Price cutting isn’t always best if you have to file a claim. Having to pay a few hundred dollars more for the right coverages with lower deductibles may become the cheaper alternative in the long run, should you have to file a claim, says Needleman. Shop around for the best deal with the most reasonable coverage, premium and deductible, and be sure to let insurance companies know about all of your home's best features.

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