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Tips to lower your premiums

Posted November 13, 2013 in Advice Column, Norwalk

Unfortunately, homeowner rates are going up. Insurance companies in Iowa have been pounded with heavy losses from wind and hail storms the last few years.

Companies were hoping that 2011 would be better than the prior four years, but turned out to be the worst. Through August of that year Iowa insurance companies were running a 145 percent loss ratio. Meaning for every $1 collected in premiums, they paid out $1.45 in claims with expenses. This has been trending for the last five years with companies losing money in the home insurance market in Iowa. Insurance companies have no choice but to raise homeowners insurance rates. Here are some tips to reduce your homeowners insurance premiums.
    •    Increase your deductibles. Just like auto insurance, policies have deductibles, and the same rule of thumb applies — carry the highest deductible you can afford. The higher your deductible, the less expensive your policy will cost. You can save up to 17 percent raising your deductible from $500 to $1,000. Deductibles of $1,500 are becoming more common.
    •    Consolidate policies. Purchasing your auto and home insurance policies with the same company can save you up to 25 percent off the home policy, and 15 percent off the auto policy. Those discounts are much greater than they were just a few years ago. Our companies are being very aggressive with discounts to make sure the auto and home rates are very competitive. The auto insurance side of the ledger has not been as unprofitable as they home insurance side, meaning the companies are willing to offer a very good rate on home insurance if they are writing your autos as well.
    •    If you live in the country, you’ll probably pay higher rates for your home insurance than if you lived in town. Why? It’s because of the longer distance to your local fire station. If you live more than five miles from the fire station, and more than 1,000 feet from a fire hydrant, you will most likely pay a higher premium. If you’re looking at buying a home in the country, call us for a free no-obligation quote to make sure you are aware of the costs before you purchase that new home. We have very competitive rates for folks who live in the country. Some agencies only offer one company. Having multiple markets helps us service your needs. One company cannot fit the needs of every customer out there.
    •    Mortgage-free discounts. We have some insurance companies that offer a 10 percent discount for people who do not have a mortgage on their home.
    •    New and renovation discounts. Most insurance companies offer discounts for new homes, or homes that have been remodeled. Updated electrical, roof, furnace or plumbing can reduce the cost of your home insurance substantially.

The good news is in Iowa, we still pay a lower premium than surrounding states by an average of more than $300 per year. Lane Insurance represents many quality companies that we are able to shop your policies to insure you pay the least amount possible for your home insurance needs. If your agent is not able to shop your coverage as rates go up, then it might be time to look around.

Information provided by Mike Lane, Lane Insurance Agency, Inc., 1225 Sunset Drive, (800) 244-4608.

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