When buying their homes, most people never really think about the costs of insurance. Yet the building you choose has a direct effect on the amount of premium you will pay to insure it. Where you buy is critical. Should there be a track record of hurricane, tornado or flood damage in the area, many insurance companies will either not offer insurance or will want high rates to match the increased risks of a claim for storm damage.

Now come to the age of the property and the building materials used. Older buildings may have an ageing electrical system more likely to catch fire and a plumbing system more likely to leak. So you should never finalize your decision to buy any property until you have competitive quotes from local insurance on what the annual premiums are likely to be. In today’s market where there are difficulties in finding mortgages, you may not be able to finance the purchase of a new place to live. This at a time when there are thousands of properties about to be or actually foreclosed going at eye-poppingly low prices. Never allow yourself to be seduced by the purchase price. Always look at the hidden costs of ownership as well.

To reduce the costs of insuring your existing home, start by shopping around to get as wide a set of quotes for renewing as possible. Always make sure you get quotes you can compare, i.e. always use the same set of information when using the online sites or completing a questionnaire on a site operated by an insurance company directly. That way you always compare like with like.

Then get a different set of quotes for an increased deductible or for combining your home and auto insurance with the same company. There are several different packages available from insurers that will give you a discount. If you are in doubt, start talking directly with the insurance companies that seem to be offering the best terms. That way, you can explore what’s on offer with a human being and get a better idea on how much you can save. There’s just as big an incentive to get new business for the companies and many offer welcome discounts to encourage people to switch their policies.

In all this, make sure you are insuring at the right value. Remember, the insurable amount is the cost of rebuilding not the purchase price you paid which includes the value of the land. Even though the resale value may have fallen in the recession, this does not mean the cost of rebuilding has fallen. Before you firm up on your home insurance policy, talk to some local builders to get guideline quotes for rebuilding costs. It may also be worth spending some money to make your home more secure against burglary, and renewing old wiring and plumbing systems. The better your property is able to withstand storm damage, the cheaper the premiums. So, to sum up, always shop around by using the free insurance quote sites, getting as many insurance quotes as possible before deciding which policy to buy, renovating and rebuilding where it will save you money in the longer term. That way, you should maximize your insurance savings.

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