Did You Say Discounts?

Updated on December 15, 2008.

WHILE THERE IS LITTLE you can do to change your home's location or basic construction (the main factors that determine your insurance rates), you can shave hundreds of dollars off your annual premium by taking advantage of the many discounts that nearly every insurer offers. Here are 10 typical ways to get a break.

1. The "In" Crowd
In almost any market, one company wants your business more than its rivals do. For example, you're highly desirable to some companies if you own a home in states where historical loss rates are low. Other insurers go after groups of customers they judge to be affluent and responsible, such as university alumni or membership organizations. The Hartford, for instance, has an arrangement to provide "lifetime continuation" coverage to members of the American Association of Retired Persons.

Travelers Property Casualty has affinity programs with several chapters of the American Automobile Association which earn members up to a 5% credit. How do you find these deals? Call your alumni association or any clubs you belong to to see if it has a deal with an insurance company. If all else fails, check with a local agent.

2. Security Counsel
When you installed that burglar alarm and those deadbolt locks, did you inform your insurance company? You should: Such home-security measures can earn you discounts ranging from 5% to 10%. 

Your central alarm system could save you hundreds on your annual premiums. Insurers will routinely give you 15% to 20% off for a fire and burglar alarm system hooked up to a third-party monitoring company. At The Hartford, you can get a 2% discount for deadbolt locks and a 2% discount for smoke alarms. 

3. The Car Connection
Many companies give discounts of 5% to 15% off your homeowners policy if you combine it with your auto policy. The only time it may be cheaper to keep them separate is if your driving record has a recent blemish on it. You also may be able to get a discount if you have a policy for your boat, a package of riders, or an umbrella policy (which ups your liability coverage to $1 million) with the same carrier.

4. Adjustible Deductible
If you already have homeowners insurance, you probably have the standard deductible of $250, though some deductibles go as low as $100. But if you're willing to take a higher deductible, the savings can be substantial. But you don't have to raise your deductible that high to realize significant savings. At Travelers, raising your deductible from $250 to $500 brings your annual premium down 10%. If you're willing to go from $500 to $1,000, you can save another 10%.

5. Out in the Country
If you live out in the boonies, be prepared to pay higher rates than folks who live in town. That's because it's harder for the local fire brigade to reach your home in an emergency. In most cases, you'll be bumped to a higher rate class if you live more than five miles from the nearest firehouse or more than 1,000 feet from the nearest fire hydrant. If you're determined to live in the country, don't count on finding a policy with a direct writer. Instead, work with a local insurance agent to price-shop among small mutual insurers that specialize in insuring dairy farms and rural homes.