Five strategies to lower your home insurance bill

Installing one safety feature in your home could help keep the burglars away and lower your home insurance costs.

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Save on home insurance

It's the same routine every month: Get home insurance bill, take a moment to cringe, send a check, and immediately start dreading the next bill.

But what if your monthly home insurance payment didn't have to make you cringe?

Ronald Jetmore, owner of Jetmore Insurance Group in Maryland, says there are some easy things you could do to help you save you big time month over month.

So keep reading to learn about five things you can do today to lower your home insurance payments tomorrow.

Tip #1 - Don't Settle with Your Current Rate

This first tip is a fairly easy one - and perhaps the smartest way to reduce your home insurance costs: shop around.

Even if you already have homeowner's insurance, there's nothing that says you have to stick with your current plan. In fact, you could potentially save by making a few simple phone calls and transferring your policy to another, more cost-effective company.

 Jetmore says this method is often the most successful money-saving tool because various companies are vying for your business. As a result, they'll likely be willing to negotiate a lower rate to beat the competition.

"Doing your homework and figuring out the details will save you money, every month, and every year. It doesn't take a lot of time - you just need to know what to ask as you compare prices and coverage."

[Click to compare home insurance rates from multiple providers now.]

Tip #2 - Install a Home Security System

Taking precautions to make sure you won't have to file a claim also ranks high on the list of how you can effectively lower your monthly payments.

"Insurance companies are encouraging homeowners to install monitored security systems by offering them substantial discounts on homeowner's insurance," says Vicki Tuua, a home insurance agent and expert. "In fact, most insurance companies are willing to give you a discount of 5 percent or more."

Insurance companies offer this discount because your home is less likely to get burglarized when you have a home security system installed, Tuua says.

In fact, a study conducted by the Rutgers School of Criminal Justice found that burglaries in Newark, N.J. steadily decreased as the number or registered home burglar alarms increased.

And an un-burglarized home is less likely to file a claim, benefiting the insurance company and ultimately, you as the homeowner.

"Considering that a home is broken into every 15 seconds and the average lost is around $2000, can you really afford to be without a home alarm system?" Tuua asks.

[Want to lower your home insurance bill? Click to compare rates from multiple companies now.]

Tip #3 - Hike Up Your Deductible

When you file a claim to your insurance company, the deductible is the amount of money you have to pay out-of-pocket before your insurance kicks in.

And it turns out that by raising your deductible, the insurance company assumes you're less likely to submit a nuisance claim for something small, or what Tuua calls a "maintenance" claim. And if you're less likely to file claim, your insurance company will typically reward you with a lower premium.

For this reason, the Insurance Information Institute's (III) website says raising your deductible is a viable way for homeowners to reduce insurance costs.

"The higher your deductible, the more money you save on your premium," states III. "Consider a deductible of at least $500. If you can afford to raise it to $1,000, you may save as much as 25 percent."

Tuua agrees that raising your deductible is a smart way to save, since, in her experience, homeowners rarely file a claim anyways.

"It's been my experience that only about 3 percent of homeowners suffer even one claim. The overwhelming majority of policyholders never put in a claim," she says. "Take my word for it. The higher the deductible, the better off you are in the long run."

[Ready to save money on your home insurance? Compare rates from multiple companies now.]

Tip #4 - Review the Claims History for Your Property

A C.L.U.E. report, short for Comprehensive Loss Underwriting Exchange, reveals any and all claims on your home, including the details of the event and how much was paid out.

C.L.U.E. reports are generated by LexisNexis, a consumer reporting agency that provides customers with access to documents and records. An insurance company may request this report when you apply for a coverage plan to determine how much you should pay, according to the Washington State office of the Insurance Commissioner's website.

And Tuua says that knowing what's listed in a C.L.U.E. can end up saving you big bucks in the long run.

"If you are looking at buying a home, definitely ask the seller to provide you a copy of their C.L.U.E. report on the property, just in case. It should only cost about $20 and if the property has a handful of claims, you could be buying more than you bargained for," she warns. "For example, a history of water damage claims might raise your premium 300 percent or more!"

If you already own a home,  you should still request a C.L.U.E. report to ensure there isn't any erroneous information that could be affecting your monthly payments.

[Think you're paying too much for home insurance? Click to compare rates now.]

Tip #5 - Assess the Value of the Possessions in Your Home

Do you know how much everything in your home is worth?

If not, you may want to start assessing the value of your possessions, because it could help you save money on your homeowner's insurance, says John Bodrozic, co-founder of HomeZada, a website that helps you manage your home's inventory and finances.

"Knowing this information will allow you to have a more balanced discussion with your agent on understanding the proper amount of coverage based on the actual contents of your home, versus a guess," says Bodrozic.

He explains that many homeowner policies have a coverage amount to replace the physical structure, and then a percent of that number is an amount for your personal contents.

"So if a homeowner does not have a home inventory, they really don't know the value of their contents, and therefore they can't compare it to what the policy is covering," adds Bodrozic.

Bodrozic says understanding the value of your possessions is crucial because if the total value is less than what is covered, you could ask about lowering your policy fee.

On the other hand, if your possessions are worth more than what's covered, or if you have one-of-a-kind artwork that's not covered by the standard policy, you'll need to specify these items in a home inventory and insure those separately through what's called a "rider."

And while insuring these more expensive pieces may raise your monthly payment, Bodrozic advises that it's worth it in the long run.

"Overall, this may raise the costs a little bit, but at least you'll know you're properly insured versus being in a risky position to not reclaim all your costs if your home is destroyed," he says.

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