How to lower your homeowner’s insurance costs

Refinancing at lower mortgage rates is one way to save some cash on your house payments, but if you’re looking for even more wiggle room in your budget, take a close look at your homeowner’s insurance.

Policies can cost thousands a year. Insurers base premiums on a number of factors, including square footage, estimated rebuilding costs and your overall risk factor. The square footage and rebuilding costs will stay the same – unless you add on to your home – but your risk profile can change over time. Periodically reassessing your risk can really save you some cash down the line.

Here’s how to get started:

Bundle for a better rate

Bundling your policies – auto and homeowner’s insurance – with one provider can really save you some money in the long-run, sometimes up to 15 percent. And if you’re a loyal customer, meaning that you’ve been with the provider for a while – usually three years or more – you might be eligible for another discount. But if your current provider doesn’t want to give you a break, start shopping around at other insurance companies to see what’s out there.

Make home improvements

One quick and easy way to really save on your homeowner’s insurance is to make some safety improvements. Check with your provider before you start hammering away at your home, but most will offer discounts for security systems and new deadbolts.

Take on more deductible

One of the easiest ways to lower your monthly premiums is to increase the deductible on your homeowner’s insurance. Just a small increase can really reap big savings. Talk to your provider about how much you’ll save monthly and figure out whether or not it’s worth the extra responsibility.

If you’re looking for more cash and haven’t yet considered refinancing, it might be worth checking into. As of today, Jan. 12, 2012, the national average mortgage rates for a 30-year fixed mortgage are at 3.89 percent, according to Freddie Mac’s Primary Mortgage Market Survey. If you have excellent credit, you might even be able to get a lower rate.