DISB Offers Tips to Consumers Considering Flood Insurance for the 2006 Hurricane Season (cont.)

To save on homeowners' and flood insurance, Hampton offers the following tips from the National Association of Insurance Commissioners (NAIC), a voluntary organization of chief insurance regulatory officials.

• Shop Around: Premiums charged for insurance vary widely from company to company so it pays to take the time and effort to shop around to get the best value for your insurance dollar.
• Stick with the company offering the best deal: Once you have considered the alternatives and chosen the company that fits your needs, consider multiple policies with that company. Some companies offer a multi-policy discount, so you can purchase your homeowner and automobile policies from the same insurer and you may receive a small discount. 
• Change your deductible: If the policy contains a standard "all peril" deductible of $250, for example, you would collect the amount of any covered property loss minus the $250. With a deductible, the premium cost of the policy is lower than if there were no deductible. In choosing the deductible amount, you bear the burden of loss up to the amount you feel you can afford. Contact the insurance company to see if it offers higher deductibles.
• Pick your form: The five homeowners package forms offered to owners of single-family, owner-occupied homes are HO-1, HO-2, HO-3, HO-3 with HO-15 and HO-8. These policy forms insure your home and belongings against at least 11 perils. The more perils your policy covers, the more you pay for the policy. 
• Actual cash value versus replacement cost: One important factor to consider when shopping for homeowners' insurance is actual cash value versus replacement cost coverage. While it may not affect your short-term premiums, it may make a large difference in your claim submission. Actual cash-value coverage will reimburse you for the cost of the property at the time of the claim, minus your deductible. It is important to account for depreciation when considering this option. For example, if you lose an audio system you purchased five years before the claim, you will be reimbursed for its current value. Replacement cost coverage, on the other hand, will reimburse the full value of the new system and submit your receipts. While up-front costs are greater, you are more likely to receive accurate compensation for your possessions. 
• Discount opportunities: Check with your insurance company to see if it offers premium discounts for the use of dead-bolt locks, smoke alarms, fire extinguishers, sprinkler systems and security systems. Also, check to see if you will receive premium discounts for hurricane or storm shutters and hurricane-resistant laminated glass windows and doors.