Shore up insurance

The average household spends $804 a year on homeowners insurance, according to the National Association of Insurance Commissioners. It really isn't the type of coverage you can go without—just think of the financial risk you'd be exposed to if your home caught on fire?and there are plenty of ways you can save money without skimping on benefits.

Conduct your own insurance audit

Call your insurance provider or agent and find out whether you're getting the best available rate. If not, ask why and what you can do to lower your premium. Sometimes, correcting an error on a credit report (and therefore raising your credit score) can lower the premium because many states allow insurance companies to use credit scores when they underwrite policies. And the lower your credit score, the more an insurer will charge, says Birny Birnbaum, executive director of the Center for Economic Justice, an advocacy organization.

Consider raising your deductible

Increasing the amount of money you have to pay from $200 to $1,000 before the insurance company pays a claim can save you up to 25 percent, or $200 on premiums, according to the Insurance Information Institute. Just be sure to budget for that larger deductible. It's probably a smart move to pay for smaller repairs out of your own pocket anyway because filing even a couple of small claims over a few years could result in a higher premium. "Companies do data mining, and they say if someone made a small claim, they may be more likely to file claims in the future," Birnbaum says. Insurers have different rules, and some advertise that they forgive a homeowner's first claim. But by filing that first claim, a consumer might miss out on a potential discount that's given to homeowners who don't seek reimbursement for repairs over a set number of years.

Ask for discounts

Most insurance companies offer a range of savings for installing safety items such as deadbolt locks, security systems, and fire alarms. Though many of those items provide savings of just a few dollars per year, they can add up to meaningful money, says Michael McRaith, Illinois' director of insurance.

Homeowners with older houses can save 5 percent to 10 percent, or up to $80, when they make major upgrades to plumbing, electrical, and heating systems, McRaith adds. And if you bundle your homeowners insurance with your life and auto insurance at the same company, you can save an additional 15 percent, or $120.

Opt out of unnecessary coverage

Identity-theft coverage is an example. Sure, identity theft is a growing problem, but the added insurance doesn't do much to protect you, Birnbaum says. An identity-theft policy usually provides customers with reimbursement for the expenses associated with the identity- and credit-restoration processes, including phone bills, certified mailing costs, and lost wages, according to the Insurance Information Institute.

Check a home's property report before you buy it

Why? When an underwriter determines how much to charge you, it evaluates both you and the property. Dwellings with a long history of claims, even if they were made by other owners, will be more expensive to insure than houses that aren't prone to problems. You can get a copy of the property report, which is known as the C.L.U.E. Home Seller's Disclosure Report, from ChoiceTrust (choicetrust.com). Each report costs $19.50 and provides a five-year history of insurance losses.

Shop around

It makes sense to comparison shop for the most competitive price. But don't automatically switch insurers just because a competitor offers a lower premium. First make sure the policies are comparable and offer the same amount of coverage. Also try to figure out whether the other company would pay a future claim or whether your request for payment would be denied, McRaith says. You can compare consumer complaints and investigations against insurance companies at the National Association of Insurance Commissioners Web site, at www.naic.org.