Insurance is a highly competitive business and the price you pay for your homeowners insurance can vary by hundreds of dollars, depending on the insurance company you buy your policy from. Companies offer several types of discounts, but they don't offer the same discount or the same amount of discount in all states. That's why you should ask your agent or company representative about any discounts available to you. Here are some things to consider when buying homeowners insurance.

1. Be sure to shop around.
It'll take a few phone calls, but they could save you a good sum of money. Ask your friends, check the yellow pages or call your state insurance department (phone numbers are listed below). Also check consumer guides, insurance agents and companies. This will give you an idea of price ranges and tell you which companies or agents have the lowest prices. But don't consider price alone.

The insurer you select should offer both a fair price and excellent service. Quality service may cost a bit more, but it provides added conveniences, so talk to a number of insurers to get a feeling for the type of service they give. Ask them what they would do to lower your costs. Check the financial ratings of the companies, too. Then, when you've narrowed the field to three insurers, get price quotes

2. Raise your deductible.
Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay according to the terms of your policy. Deductibles on homeowners policies typically start at $250. By increasing your deductible to $500, you could save up to 12 percent; $1,000, up to 24 percent; $2,500, up to 30 percent; and $5,000, up to 37 percent, depending on your insurance company.

3. Buy your home and auto policies from the same insurer.
Some companies that sell homeowners, auto and liability coverage will take 5 to 15 percent off your premium if you buy two or more policies from them.

4. When you buy a home...
Consider how much insuring it will cost. Because a new home's electrical, heating and plumbing systems and overall structure are likely to be in better shape than those of an older house, insurers may offer you a discount of 8 to 15 percent if your house is new. Check its construction, too. Brick, because of its resistance to wind damage is better in the East; frame, because of its resistance to earthquake damage, better in the West. Choosing wisely could cut your premium by 5 to 15 percent. Avoiding areas hat are prone to floods can save you $400 or so a year for flood insurance. Homeowners insurance does not cover flood-related damage. If you do buy a house in a flood-prone area, you'll have to buy a flood insurance policy, too.

Does your town have full-time or volunteer fire service? And is your house close to a hydrant or fire station? The closer your house is to firefighters and their equipment, the lower your premium will be.

5. Insure your house, not the land.
The land under you house isn't at risk from theft, windstorm, fire and other perils covered in your homeowners policy. So don't inlcude its value in deciding how much homeowners insurance to buy. If you do, you'll pay a higher premium than you should.

6. Beef up your home security.
You can usually get discounts of at least 5 percent for 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 station or other monitoring facility. These systems aren't cheap and not every system qualifies for the discount. Before you buy such a system, find out what kind your insurer recommends and how much the device would cost and how much you'd save on premiums.

7. Stop smoking
Smoking accounts for more than 23,000 residential fires a year. That's why some insurers offer to reduce premiums if all the residents in a house don't smoke.

8. Seek out discounts for seniors.
Retired people stay at home more and spot fires sooner than working people. Retired people have more time for maintaining their homes, too. If you're at least 55 years old and retired, you may qualify for a discount of up to 10 percent at some companies.

9. See if you can get group coverage.
Employers, alumni and business associations often work out an insurance package with an insurance company at very competitive rates. Ask your company's personnel manager or your association's director if such a package is available to you.

10. If you stay with an insurer...
If you've kept your coverage with a company for several years, you may receive special consideration. Several insurers 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.

11. Compare the limits in your policy and the value of your possessions t least once a year.
You want your policy to cover any major purchases or additions to your home. But you don't want to spend money for coverage you don't need. If your five-year-old fur coat is no longer worth the 20,000 you paid for it, you'll want to reduce your floater and pocket the difference.

12. Look for private insurance first.
If you live in a high-risk area -- say, one that is especially vulnerable to coastal storms, fires, or crime -- and have been buying your homeowners insurance through a government plan, you should check with an insurance agent or company representative. You may find that there are steps you can take that would allow you to buy insurance at a lower price in the private market.

If you have questions about insurance for any of your possessions, be sure to ask your agent or company representative when you're shopping around for a policy. For example, if you're like the steadily increasing number of persons who are running a business out of your home, be sure to discuss coverage for that business. Most homeowners policies cover business equipment in the home but only up to $2,500 and they offer no business liability insurance.

Although you want to lower your homeowners insurance cost, you also want to make certain you have all the coverage you need.

You Can Reach Your State Insurance Department at:

AL: AK: AS: AZ: AR: CA: CO: CT: DE: DC: FL: GA: GU: HI: ID: IL: IN: IA: KS:

205-269-3550 907-465-2515 684-633-4116 602-912-8400 501-686-2900 916-445-5544 303-894-7499 203-297-3800 302-739-4251 202-727-8002 904-922-3100 404-656-2056 671-477-5106 808-586-2790 208-334-2250 217-782-4515 317-232-2385 515-281-5705 913-296-7801

KY: LA: ME: MD: MA: MI: MN: MS: MO: MT: NE: NV: NH: NJ: NM: NY: NC: ND: OH:

502-564-3630 504-342-5900 207-582-8707 410-333-6200 617-521-7777 517-373-9273 612-296-6848 601-359-3569 314-751-2640 406-444-2040 402-471-2201 702-687-4270 603-271-2261 609-292-5363 505-827-4500 212-602-0203 919-733-7349 701-328-2440 614-644-2658

OK: NE: OR: PA: PR: RI: SC: SD: TN: TX: UT: VT: VI: VA: WA: WV: WI: WY:

405-521-2828 503-378-4271 504-342-5900 717-787-5173 809-722-8686 401-277-2223 803-737-6160 605-773-3563 615-741-2241 512-463-6464 801-538-3800 802-828-3301 809-774-2991 804-371-9741 206-753-7301 304-558-3394 608-266-0102 307-777-7401