Fuming homeowners find ways to trim insurance bills

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Posted on Sun, Sep. 17,

Fuming homeowners find ways to trim insurance bills

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BY BEATRICE E. GARCIA

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Miami Herald Sun, 17 Sep 2006 11:26 AM PDT

Debbie Roth Arthur was fuming when she got her State Farm renewal

notice. Her annual premium tripled to nearly $5,800 from $1,900.

After the initial shock wore off, Arthur worked with her agent to

reduce the pre-mium to about $3,500. Among the ways was raising her

windstorm deductible from 2 percent to 5 percent and her

property/casu-alty deductible from $1,000 to $5,000. She already had

credits for shutters and fire alarms for her 1998 home in Kendall.

" Now the premium has just doubled, rather than tripled, " says Arthur.

In recent weeks, South Florida insurance agents have been fielding

desperate pleas from clients like Arthur who can't afford the huge

bills arriving in their mailboxes.

There are steps homeowners can take to reduce their annual premiums,

possibly by $2,000 to $3,000 if they qualify for all the credits

offered by an insurer. Savings will vary greatly depending on the

insurance company, policy type and insured value.

Besides raising deductibles, shedding rid-ers for jewelry, fancy

stereo equipment or detached structures such as fences and sheds can

save substantial bucks. You could even part with replacement-cost

coverage.

However, there is a price: Reduced cover-age and much higher out-of-

pocket expenses if your home is damaged in a catastrophec.

" Insurance is an individual thing. What's important to me may not be

important to you. That's why you need to sit with your agent and

review your policy, " says Manny Miranda, a State Farm Florida agent

in West Kendall.

" Miranda adds homeowners should be sure they have access to savings

or a home equity line of credit to cover such expenses.

" Basically, what we're doing is stripping away all the extra

coverages from a policy, " says Gaby Dominguez, an agent with Avante

Insurance in West Miami-Dade. " We got used to all these bells and

whistles when premiums were low. "

Ten tips to reduce your insurance bill

Hike deductibles: This can be painful, but it provides big savings.

Move the windstorm deductible from 2 percent to 5 percent or even 10

percent. And on the property/casualty portion of a homeowners

policy, deductibles can range from $500 to $2,500 or even $5,000 on

big homes. Increase it by $1,000 or even more. Potential savings:

$500 or more on your premium.

Opt for actual cost rather than replacement coverage on contents.

That means if furniture and clothing are damaged, you'll receive

what they're worth after depreciation. Most policies offer 50

percent to 75 percent of insured value for contents. For the

structure, most insurers require coverage for the full rebuilding

cost.

Avoid being overinsured. Insurance should cover the cost to rebuild

your home. That's the amount of insurance you should buy, regardless

of the market value or the price you paid for the house.

Many insurers apply ''inflation guards,'' which adjusts the insured

value of a policy upward each year to keep up with higher

construction and labor costs. Some insurance companies might be

willing to drop inflation increases.

Drop coverage for fences, gazebos, garden sheds and screened

enclosures. After Hurricane Wilma wiped out many of these

structures, insurers dramatically increased the cost of this

coverage anyway. Mold protection may be another one to cut: If mold

is caused by a hurricane, removing it is covered by your windstorm

policy.

Rack up those hurricane mitigation credits on your windstorm

coverage. A ''hip'' roof, where all sides slope upward, is good and

can mean an instant credit. A ''gabled'' roof is bad because its two

gabled ends -- two vertical sides -- mean more wind resistance and

thus no credit. Straps or clips that attach roof trusses to walls

mean another credit. A full set of windstorm shutters or

shatterproof windows can mean premium savings. With a hip roof: 23

percent to 32 percent; without a hip roof: 7 percent to 19 percent

for homes built before 2002; more on new homes. Bottom line: These

savings could trim $1,000 or more depending on the insurer.

Get your alarm discounts. Burglar and fire alarms: 5 percent off the

property/casualty premium, more when combined with a sprinkler

system.

Score on new or updated homes. Homes under 10 years old can qualify

for discounts up to 20 percent.

Some insurers are adding surcharges on older homes. An inspection by

an engineer, building inspector or architect might be needed to

verify that an older home has a new roof, along with plumbing,

electrical and heating/cooling systems that meet current building

codes. Inspections cost $150 to $200.

Be claims free. Discounts for non-wind coverage can range from 5

percent off after two years with no claims to up to 20 percent if

there are no claims after nine years. The flip-side: Many insurers

impose a surcharge when non-hurricane claims are filed.

Group your home, auto, even boat policies with the same insurer.

State Farm, for instance, offers a 2 percent discount on a

homeowners policy and 15 percent off on auto insurance.

Harden your home for the future. Apply for the state's new free

inspection program at www.mysafefloridahome.com or call 1-800-342-

2762 and learn about your home's construction and what mitigation

credits you can get. You may also be eligible for matching grants to

strengthen your home against future storms.