First, it will not protect you from all perils. No basic homeowner's policy protects you from flood damage. For flood protection you need to buy a separate policy.



There are other perils, mostly perils that are localized to your area, that most policies either don't cover at all or only cover to a limited degree. Things such as wind damage along the East Coast, tornadoes in the Midwest, and earthquakes along the West coast are examples. If you wish these perils covered you will usually need to purchase a separate policy.

There are several things you can do that will reduce the cost of your homeowner's insurance on a monthly basis.

First, pay your bills on time. Did you know that your credit score will affect how much you pay for homeowner's insurance? It can - so keep your credit record spotless.

Pay premiums yearly. If you can't swing that, then pay your premiums biannually or quarterly. If that's still not in the cards then set it up so your monthly premium is paid automatically from your bank account - that will still save you a few dollars each month.

Installing motion-detecting floodlights and putting deadbolts on all exterior doors and making certain that every window has a working lock could save you 5% or more month after month. If anyone in your household is 55 or older and retired let your agent know, as this will also save you money.

Up grading your plumbing or electrical system can save you quite a bit every month. Ask your agent how much such an upgrade would save you and then see if the cost / savings ratio works in your favor.

Buying a home protection system that monitors your home 24/7 and reports problems directly to the fire department or the police can be a real lifesaver - and it can cut the cost of your homeowner's insurance up to 20%. However, you need to speak with your agent before you make a final decision as not every system will earn you the full premium discount.

You can often save even more on a home security system if you run a small business out of your home. Ask your tax advisor how much of the cost could be tax deductible - adding a tax deduction on top of your monthly premium savings could make such a system very appealing.

Most people buy a standard homeowner's policy with a $500 deductible. If you're looking for insurance one thing you can do is double that deductible to $1,000. Doubling your deductible could save you as much as 25% every single month on the cost of your premium. Buying the policy online is another way to save a lot of money. Don't fall into the trap of thinking that you only have to run a price comparison on just 1 of the many websites that encourages you to price-compare homeowner's insurance in your state.

Since each site only compares the prices of a very small number of companies you'll want to make your price comparisons on at least 3 different websites so you can feel confident that you are seeing the prices of as many companies as possible.

Once you've finished running all of your price comparisons all that's left is for you to decide which companies you feel comfortable doing business with and then choose the lowest-price from among those companies - and you will have the best price on insurance that you can possibly get in your state and you will be saving money every month for years to come.