The land under your house isn't at risk from theft, windstorm, fire and the other hazards covered in your homeowner's policy. So don't include its value in deciding how much homeowners insurance to buy. Just as an example, let's say that your house has a current market value of $250,000. Of that price, perhaps $100,000 may be directly related to the value of the land, while the remaining $150,000 would be the actual value of the house.

If you insure your house for the full market value of $250,000, you're wasting $100,000 of insurance on the land. Instead, you should insure your home for the amount it would take to replace the house, but don't include the cost of the land. This could result in a substantial reduction in the cost of your premiums.

Increase Your Deductible

A deductible is the amount of money you pay towards a loss before your insurance policy begins to pay a claim. The higher your deductible, the more money you can save on your premiums. In most cases, you'll probably want a deductible of at least $500. If you can afford to increase your deductible to $1,000, you may save as much as 20 to 25 percent on your premiums.

Buy your home and car policies from the same insurer

Many insurance companies that sell homeowners insurance also provide car insurance. If you buy both policies from the same company, they may give you a discount that could be as high as 15 to 20%. Be certain to verify that the combined price is lower than buying the different coverages from different companies.

Make your home less risky

Check with your insurance agent or company representative what you can do to make your home more resistant to hail, windstorms and other natural disasters. You might find that you can save on your premiums by adding window shutters, reinforcing your roof or installing stronger roofing materials. Older homes can be modified to make them better able to withstand earthquakes. In addition, consider modernizing your heating, cooling, plumbing and electrical systems to reduce the risk of fire and water damage.

Improve your home security

You can usually get discounts of at least 5 percent by installing a smoke detector, burglar alarm or dead-bolt locks. Some companies offer to cut your premium by as much as 15 or 20 percent if you install a sophisticated sprinkler system and a fire and burglar alarm that rings at the police, fire or other monitoring stations. These systems are usually advertised at attractive prices for equipment and installation, along with a monthly monitoring fee.

Before you buy such a system, make sure your insurance company offers a premium discount and evaluate the value of adding such refinements.

Check out all available discounts

Many insurance companies offer several types of discounts. For example, since retired people normally stay at home more than working people, they're less likely to be burglarized and may detect fires sooner, too. Retired people also have more time for keep their homes in good condition. If you're at least 55 years old and retired, you may qualify for a discount of up to 10 percent at some companies. Some employers and professional associations administer group insurance programs that may offer an even better deal than you can get on your own.

Keep a good credit record

Establishing a solid credit history can cut your insurance costs. More and more insurance companies are using credit information to price homeowners insurance policies. In many states, your insurance company must tell you about any adverse action, such as a higher rate, at which time you should verify the accuracy of the information on which the insurer relied.

Be sure to protect your credit rating - pay your bills on time, don't obtain more credit than you need and keep your credit balances as low as possible. Check your credit record on a regular basis and have any errors corrected promptly so that your record remains accurate.

Stick with the same company

If you've kept your insurance coverage with the same company for several years, you may receive a special discount for being a loyal, long-term policyholder. Some insurance companies will reduce their premiums by 5 percent if you stay with them for three to five years and by 10 percent if you remain a policyholder for six years or more. Be sure to periodically compare your premium price with that of other companies to be certain that you're getting the best deal.

Review the limits in your policy and the value of your possessions yearly

You don't want to purchase insurance coverage you don't need, but you do want to make sure that you do have sufficient coverage. For example, you may be insuring a rare painting that you purchased years ago for $5,000. Perhaps that painting has now appreciated in value to $15,000, so you'll want to increase your insurance coverage to include the actual current value.

On the other hand, you may be insuring belongings that have declined in value over the years, so a downward adjustment in insurance coverage may be in order.