Home insurance, a legal necessity when you begin paying your mortgage, and a practical tool after, can have significant costs if you do not buy the right insurance to fit your needs.

1.) Raise your deductible.

If you are unwilling to take any of the risk then you will be forced to pay extra for that choice. But insurance is designed to protect you from unforseen excessive costs. If you set your deductible at a reasonable level (preferably at or above $1,000) that will significantly lower your premium.

2.) Only insure your home - not the land.

While the land may be part of the price you paid for your home, in most cases you do not need to insure it as it is not likely to be lost/destroyed/diminished in value by a fire or a burglary.

3.) Shop around

Insurance contracts are essentially bets that companies make that something will not go wrong with your home/car/health/life/etc. Risk premium calculations can vary widely between different companies. Shop around for the best deals possible.

4.) Ask for discounts

• Some insurance providers offer lower rates if you package/bundle together multiple insurance products like home insurance, auto insurance, and life insurance. If you have been a loyal insurance customer with no claims or few claims they may be able to offer you discounts on additional insurance products.
• Some insurance companies offer discounts for seniors, military members, police officers, fire fighters, and other groups. Check to see if you qualify for any special member discounts.
• Business associations, employers, and alumni may also offer special discount rates.

5.) Keep a clean credit score

Since insurance contracts are risk contracts many insurance companies use credit scores in part to determine how risky a particular consumer may be. Paying your bills on time and keeping credit card debt low are keys to building a strong credit score.

6.) Install protective & safety features

Ask your insurance agent questions about discounts for observing home safety and security protections. Fire extinguishers, deadbolt locks, smoke detectors, and alarm systems can significantly lower your premium.

7.) Stop smoking

Smoking causes over 20,000 fires a year. If nobody in your home smokes, inform your insurance agent and you may be eligible for a discount.

8.) Make sure your homeowner’s insurance is comprehensive

If you are in an Earthquake or flood prone area make sure you buy additional coverage. These additional insurance coverages can cost hundreds per year, but generally are not part of a typical home insurance contract.

9.) Inventory your possessions yearly

If the value of your home and/or possessions changes significantly, make sure you inform your insurance agent and adjust your policy.

10.) Ask questions!

You can reach your state Insurance Department using the following phone numbers:

Gasoline & Combustibles

• Only store gasoline in a container approved for gas storage. Preferably store it in a dry, cool, and locked shed or garage.
• Keep all dangerous products sealed except while in use.
• Do not use machines that throw sparks near fires and/or fuel.
• Do not leave gasoline or combustible products near fires.

Electrical Appliances

• Do not plug in too many appliances into a single outlet.
• Monitor electrical cords and extension cords to ensure they are clean and safe. If you have pets that like to chew on electrical wires teach them to play with toys instead. You may be able to curb their appeal for electrical wires by putting a small coating of Tabasco sauce on the wires they chew on.
• Turn off and unplug electrical appliances when you will be leaving for an extended period of time.
• Do not use electrical appliances near running water.

Candles

• Use a sturdy non-flamable candle holder.
• Never leave a burning candle unattended.

Smoking

• Do not smoke when you are sleepy. Many house fires are started by a smoker falling asleep and forgetting that they have a lit cigarette.
• Do not put burning cigarettes in the trash. Rinse the cigarette in cold water prior to throwing it away.
• Use a large sturdy ash tray, on a sturdy table out of the reach of pets.

Heating & Dryers

• Keep matches and lighters locked away from children.
• Turn off space heaters while leaving the area and/or going to sleep.
• Ensure space heaters are on stable ground, and keep them a minimum of 3 feet from burnable objects. If you have a fireplace, keep burnable objects away from your fireplace and put a screen or glass barrier in front of your fireplace.
• Annually have any fireplaces, chimneys, furnaces, and coal or wood stoves inspected. Clean them as necissary.
• Only use your clothes dryer while home. Ensure the lint trap is cleaned between each use. Have your dryer taken apart and professionally cleaned every couple years.

Kitchen & Cooking

• Keep the range and surrounding area clear and clean.
• Do not wear loose frumpy clothing while cooking.
• Stay in the kitchen while cooking.
• Know how to put out small pan fires. For grease fires do not use water. Suffocate the fire using the pan’s lid or baking soda.
• When grilling, ensure you have adequate distance between the grill and nearby plants, structures, and other objects.

Safety Planning & Prevention

• Install ionization- and photoelectric-type smoke alarms on each level of your home, near or in each bedroom. Change batteries January 1st (or another memorable day) each year. Push the test button on the first of each month to verify your smoke alarms still work.
• If you are remodeling or are building a new home, consider installing a home fire sprinkler system.
• Install at least one fire extinguisher on each level of your home. Ensure it stays charged, and practice using it at least once.
• Create a fire escape plan with a minimum of 2 exits from each room. Hold fire drills at home at least 2 times a year, and pick a common meeting place for them.
• Teach everyone in your family how to “stop drop and roll” in case their clothes catch fire.
• If you leave a burning house do not go back in for any reason.

The Uniform Crime Reporting Program has tracked 100 years of crime statistics in the United States, and in 2007 burglary rates were down 0.2%.

• Burglary accounted for 22.1 percent of the estimated number of property crimes committed in 2007.
• Of all burglaries, 61.1 percent involved forcible entry, 32.4 percent were unlawful entries (without force), and the remainder (6.5 percent) were forcible entry attempts.
• In 2007, burglary offenses cost victims an estimated $4.3 billion in lost property; overall, the average dollar loss per burglary offense was $1,991.
• Burglary of residential properties accounted for 67.9 percent of all burglary offenses.
• Offenses for which time of occurrence was known showed that 57.4 percent of burglaries took place during the day and 42.6 percent at night.
• Offenses for which time of occurrence was known showed that more residential burglaries (63.6 percent) occurred during the daytime while 56.4 percent of nonresidential burglaries occurred during nighttime hours.

The Washington Post put many of the recent statistics in a beautiful - yet sad - image.

image source