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How To Reduce The Average Cost Of Homeowners Insurance

By Mike Heuer

There are many ways to learn how much does homeowners insurance cost for a particular home in a specific location. And a few simple steps can help people find the best deal and not sacrifice coverage while saving on their homeowners insurance cost.

Most people understand the advantages of bundling policies, such as auto and home, with the same insurer to obtain lower average cost of homeowners insurance. The same goes for having a higher deductible to reduce how much does homeowners insurance cost. But many other precautions can greatly impact the price paid for home insurance.

The first step to take is when buying a house, choosing one that is located in a relatively secure area and close to emergency services. One located in a gated community, near a fire or police station – preferably both, and in a low-crime area will have a lower average cost of homeowners insurance than policies for a similar home in another area. Rates often vary, but the homeowners insurance cost typically will be lower the closer a house is situated to even a fire hydrant as well as a fire station, police station and other emergency services.

Once a home is chosen, a common move people make to have a lower average cost of homeowners insurance is to purchase actual cash value coverage instead of replacement cost coverage, which will pay claims based on the actual cost to repair or replace a home instead of basing claims on its market value. Doing so might lower the homeowners insurance average cost, but it also can leave the homeowner in a financial bind if it is damaged or destroyed and the cost to fix or rebuild is much higher than the actual cash value. Older homes in particular can have a large difference in the cost to rebuild or replace versus the actual cash value that would be paid by an insurance claim.

In some areas and states, such as along the Gulf Coast, is can be difficult finding home insurance from private insurers, and many people automatically opt for a government-backed insurance plan. Most often, they don’t know how much does homeowners insurance cost from competing private insurers. But assuming the government-backed policy is the best option often times can result in a higher homeowners insurance cost.

Instead, visiting a state insurance department’s website and learning which insurers underwrite homeowners insurance coverage in the state and how to contact them can help consumers to compile a list of state-regulated insurers. Once they list is made, they can visit their respective websites and determine which ones are the best options for them based on the types of policies and coverages they provide.

Then, consumers can shop around, learn for themselves what is the approximate average cost of homeowners insurance and find the best policy with the lowest homeowners insurance cost.

It also helps to review policies at least once per year and checking with other insurers before renewal time to see if a better deal might be available on the same type of homeowners insurance plan to ensure no more money is being spent than necessary.