How To Get A Cheap Home Insurance Policy

by Silicon Valley Blogger on 2009-12-0112

More tips on how to cut insurance premiums in half.

Once you’ve become a homeowner, you’re ready to budget for many expenses, including an all-important one: your homeowner’s (or home insurance) policy. Here are a few tips to think about before you get that insurance policy:

How To Get Cheap Home Insurance

1. Compare quotes.
You’ve got to start somewhere. Get recommendations from people you trust — whether from friends, family or even your lender. You can also get free quotes online through sites like InsureMe, NetQuote and Insure4Less to get some idea of what’s available.

2. Have good credit.
Insurance is one of those things you can get a lower rate for if you happen to maintain a good credit history. Get your free credit report at and your FICO score at

cheap home insurance policy

3. Determine how much coverage you should get.
If you’ve got a mortgage, you’ll be required to get homeowners insurance equivalent to the amount of your mortgage. In many cases, your lender will insist on this minimum coverage amount. But also check your options with your insurance agent.

4. Lower your insurance premium by raising your deductible.
Like with any form of insurance, the higher the deductible, the lower your premiums.

5. Decide between replacement cost or actual cash value.
As far as I know, the replacement cost is what you’d pay to repair or rebuild your house in the same way as it was originally built, without considering depreciation. Actual cash value is the cost of rebuilding after depreciation is taken into account.

6. Buy multiple insurance policies from the same insurance company.
Your insurer will most likely give you discounts for purchasing multiple insurance policies with them. It’s the incentive they’ll give you for getting more of your business. For instance, buying your umbrella, auto, life, homeowner’s and personal property insurance from the same insurer can lower your overall rates.

7. Maintain your house well.
By retrofitting your home with more modern materials and up to date electrical, plumbing and heating systems, you’ll likely qualify for cheaper premiums. With a more disaster resistant house, the less risk you pose to your carrier. As a caveat, adding a security system and smoke alarm to your home should qualify you for discounts.

8. Ask for additional discounts.
Ask your insurer for any discounts that are available (and what you can do to obtain them).

9. Don’t claim everything.
Some people make the mistake of making a claim for every small mishap they experience at home. Whether it be a leak in their washing machine or a hole on the roof, you’ll want to assess whether the repair costs are worth the claim and coverage. Many times, the smaller claims you file may not be worth the subsequent increase in premiums you may end up triggering. As they say, choose your battles!

10. Review your insurance “standing”.
There’s this thing called the Comprehensive Loss Underwriting Exchange (CLUE) which tracks insurance claims per address. You can find this type of information from It may be a good idea to look over your insurance history and review it for accuracy as this data may affect your overall insurability. Note that you’ll be charged for any CLUE reports that you decide to order.

Reminder: Why You Need Homeowners Insurance

And here’s a reminder of why you need homeowners insurance. I was checking out my local news the other day and came across this story (note: the link to the article is no longer available): A heavy crane accidentally falls on a house in suburbia. Freak accidents do happen, and can happen to anyone!

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home insurance policy

home insurance policy

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Insurance: you’ll never know when you need it! And as this case shows, it’s more than just for peace of mind.

Copyright © 2009 The Digerati Life. All Rights Reserved.

{ 12 comments… read them below or add one }

John DeFlumeri Jr December 2, 2009 at 3:44 pm

You definitely need the insurance. Thanks for all those ways to save money on it.

John DeFlumeri Jr

Kristen from FiLife December 2, 2009 at 5:52 pm

Nice overview. Also: sometimes you can negotiate a deal if you take out all of your insurance policies with the same provider.

Goran Web Design December 3, 2009 at 4:03 am

Those pics are funny! Just what were they trying to do there? Isn’t the contractor liable in this instance? One would usually find that the c0ntractors insurance will cover something like this, or am I wrong?

Michael Harr @ TodayForward December 4, 2009 at 8:15 am

Having been through a total loss due to fire, I can tell you that you should NEVER try to reduce your costs by buying the wrong (cheaper) coverage options. When you have a major casualty, making sure you have the right coverage is all that matters. Of course, most people won’t experience a total loss like we did, so making the premiums affordable is certainly important.

The best way to do this is through a higher deductible. If you want less expensive coverage, get as high a deductible as you have cash available to cover. Beyond this, keeping multiple lines of insurance (auto, home, etc.) with a single company will be the next best way to save. NEVER try to save money on insurance by reducing necessary coverages. Sure, skip some of the bells and whistles that don’t really add value, but max it out where it counts.

Also, homeowners policies are relatively standardized in their basic specifications. An HO-5 policy is the way to go. This way, when you do have a major problem, you won’t have to figure out what’s covered. An HO-5 policy states specifically what isn’t covered…a big deal when it comes to determining whether or not you’re covered.

Jim Gronigner December 15, 2009 at 12:32 pm

Great photos, really tells the story….

Nathan Anderson March 5, 2010 at 1:17 pm

Those pictures are crazy!

That’s a day when you thank your insurance agent greatly.

Eddy April 9, 2010 at 3:39 pm

Well, you never know when your house needs the insurance. Better prepare for the worst.

Luke May 16, 2010 at 2:30 pm

Some nice tips here. It’s worth thinking about #6 though – in some cases you’ll get discounts by buying multiple products with one company, but in others, your overall bill will be lowest by shopping around a little. Makes managing your bills a bit more complex, but worth it IMO.

Susanna May 17, 2010 at 6:23 am

This is a good read, thank you for sharing. Every time I see pictures like that, I cringe while imagining the people effected by accidents like that, and the possibility that their lives could be completely ruined (at least in the short term) if they don’t have insurance.

Michael Peel June 16, 2010 at 1:31 pm

One of the best methods I have found to lower your home insurance is to raise your deductible. This can be stressful for some but you need to look at it over the long haul. You need to factor in how many times you may need your insurance (can be difficult to determine), how much money you generally have each month and what amount you would like to pay each month for your premium.

I find that most people are surprised to realize how much the monthly premium can go down by simply increasing the deductible by $300, $500 or even $1,000.

For some, this may be the only option they have to reduce their annual premiums and it should be a avenue they look into.

Judah Han June 17, 2010 at 1:29 pm

The pictures say it all!

While some say it is foolish to have home insurance, I think it is foolish not to. There are too many things out of “your control” that can happen to your home. Not convinced, think about your neighbors and how they could set you house ablaze, flood it, or damage it with some crazy construction project.

Don’t make the mistake too many people do.

Silicon Valley Blogger August 9, 2011 at 1:23 pm

I found a video that personifies just why we need home insurance. The pictures we’ve shown above are of a crane that lands on a house due to some freak accident. Well, here’s how it could possibly happen as a pool is being installed. As an aside, I’m not sure why a pool is built in this manner (I’m guessing that access to the backyard of the house is pretty difficult).

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