Premiums vs. Deductibles

• The premium (cost of the insurance) can be higher or lower depending on the amount of the deductible (portion of the costs you'll have to pay when you file a claim). For instance, if you want to pay less money up front, you'll purchase an insurance policy that will require you to pay more money out-of-pocket in the event you need to file a claim. This makes sense if you are purchasing a new home in an area where few hazards are present, and if you don't have many costly possessions.
  
  

Replacement Cost vs. Cash Value

• Cash value means the amount you paid for the item. Replacement cost means what it would cost to purchase a comparable item at current market prices. It's always better to obtain coverage for replacement value. For example if you have a gold gemstone ring that you purchased on sale five years ago for $50 and you were to replace that ring today, you would likely have to pay at least twice as much for it. Cash value insurance would only pay you the $50 you originally paid.
  
  

Multi-Policy Discounts

• Many insurance companies offer a multipolicy discount. So, if you have both your homeowners insurance and your car insurance with the same company, and that company offers such a discount, you'll save money on both policies. If you have more than one vehicle -- a boat, motorcycle or another car -- you'll save money on the insurance for each item.
  
  

Flood Protection

• If your home is located in an area where the risk of floods is higher than most (e.g., coastal cities in hurricane-prone areas), you should purchase flood insurance. Most homeowners insurance policies do not automatically cover this hazard, so if you think you're at risk, you would do well to ensure that you are covered.
  
  

Periodic Review

• Don't get complacent once you have a policy in place, even if your carrier has provided a great set of discounts. Insurance companies are highly competitive, and some companies are more efficient than others, which means their costs are lower, and in turn, their coverage costs less. Make sure you shop around from time to time to ensure that you are getting the best price for the best coverage on all of your insurance needs.