Home insurance costs are rising every year.  Natural disasters, such as earthquakes, wildfires, tornados and hurricanes are partly to blame.  Homes becoming infested with mold are also on the rise.  In addition, rising home values and building costs push the prices up.

As we have been telling our members since 2001, credit reports have an effect on your insurance premiums.  If you have a substantial amount of debt or have missed a large number of payments, you could be at risk for higher premiums.  The insurance companies claim the more debt a person has, the more likely the event of a claim.  Consumer groups, NCCC included, dispute this claim.  The only way to help is to keep your bills current and pay down your debt.  You can also find an insurance company that doesn’t use credit scoring in determining rates.  If your credit score has changed recently, you can also request that your insurance company reevaluate your credit insurance score.

Let’s face it— you didn’t get homeowner’s insurance so you could claim a leaky gutter repair or a cracked window.  You got the insurance to protect your from a major loss, such as a cracked foundation, fire, lightening damage or other expensive damages.  Raise your deductible.  Raising your deductible from $250 to $1000 could save you 25% or more on your insurance.  Then, just cover any damage that does occur yourself instead of filing a claim.

To avoid costly repairs, keep your home in check.  Fix any leaks promptly and properly.  Don’t let dead trees and branches linger near your home.  If you’re in an area prone to wind damage, install storm windows and shutters.  Improve drainage around the home and make sure all maintenance is performed on your heating and air conditioning systems.

Many insurance companies are no longer offering true replacement cost of any loss.  Avoid cash value policies, which cost less but could mean lost money if you need to file a claim.

A true replacement cost policy will rebuild or repair your home to the exact way it was without costing you any more than your deductible.  A cash value policy will only pay the value the home is worth— even if it costs $100,000 more to rebuild it.  Also, avoid market value policies.  You could pay too much!

You can also get discounts on your policy.  Consider installing a home security system (heat, smoke, burglar) linked to a central monitoring station.  You could save up to 15% or more.  Check with your insurance company before buying a system.

If you buy your insurance policies from one company, you could receive a multipolicy discount.

You may also get discounts by having nonsmokers in the home or by renovating old electrical or plumbing systems.  Mature home owners (seniors or retirees) also sometimes receive a discount.

Remember to reevaluate your policy every year.  Items that were once worth a lot to replace may not be worth that much today.  Remember to tell your insurance company about any significant remodeling or home additions.

Also, check to make sure you don’t need separate flood, fire or earthquake coverage.  Sometimes it is not included on your primary policy.  You should also consider about $1 million in personal liability coverage, which costs around $150 per year.  Buy an umbrella policy, which will take over where your home and auto coverage stop.