10 Hidden Home Insurance Credits

When looking for ways to save on home insurance, many homeowners stop at a smoke detector, a security system and a multiline discount for insuring your home and vehicle with the same company.

But property and casualty companies have a variety of other lesser-known credits available that can shave your homeowners insurance premium by up to 25 percent.

"Mitigating loss is a big part of who we are and what we do," says Sean Meehan, second vice president of property strategy and design for Travelers Insurance of Hartford, Conn. "Yes, we pay claims. But at the same time, we want to help prevent claims, which lowers premiums in the long term."

Madelyn Flannagan, vice president of agent development, education and research for the Independent Insurance Agents & Brokers of America, or the "Big I," agrees: "Insurers give a discount to encourage people to be more careful and to better understand the homes they're insuring."

Here are 10 "hidden" home credits that may be available through your agent to cut down the cost of home insurance. Discount estimates are courtesy of the Big I.

Do you live in a gated community? Your home insurer shares your peace of mind in knowing there's a layer of security between you and home invaders, and may be willing to credit you for lessening their risk.

"That definitely falls under loss mitigation," says Meehan. "If you live in a gated community, it's a lot less attractive to a thief than a place that doesn't have that security."

In the larger scheme, where you live always affects the rates you pay. That's logical, since some parts of town statistically pose more risk than others of vandalism and theft. But sometimes living in the country can actually cost more.

"If you live near your local fire department in a safe, quiet, easily accessible neighborhood, your homeowners rates might be lower than if your home is located off the beaten path," says Meehan. "Your home may cost more to insure if you are many miles from the nearest fire department."

Gated community credit: 5 percent to 20 percent.

Want to scare your insurance agent? Tell him your teenage son rewired your house over the weekend. Then expect your premium to go through the roof.

The math is simple: house + old wires = fires. According to the U.S. Fire Administration, in a typical year, home electrical problems result in 67,800 home fires, 485 deaths and $868 million in property losses, according to a 2006 report. The USFA estimates that home wiring causes twice as many fires as electrical appliances.

Considering new wiring? Depending on the age of your home, you may qualify for a new wiring credit.

"New wiring, if it's installed right, is much safer and less likely to cause any type of outages, shortages or fires," says Meehan. "It can be an insurance eligibility issue, too, because a lot of companies are not as keen to write old knob-and-tube wiring because of the fire risk. It could limit your options.

New wiring credit: 10 percent.

Your roof is a major concern to your insurance company. Not only does it take a beating from wind, rain, hail and hurricane-blown debris, but once it's compromised, the damage costs on a home insurance claim can rise dramatically.

So it comes as no surprise that, as more and more impact-resistant roofing materials have come to the market, insurers have been increasingly willing to offer rate discounts to homeowners as an incentive to invest in a "hard hat" for their abodes.

Your state's department of insurance can direct you to information about impact-resistant UL 2218 standard roofing material, which is graded as Class 1 through 4, with Class 4 being the sturdiest. Insurers may require that your roofing material be tested by an approved laboratory before issuing a credit. The upgrade may also net you a tax deduction.

"Insurers definitely are giving discounts for Class 4 because, if your roof blows off in a rainstorm or nor'easter, the water damage is going to be substantial, resulting in a much larger claim," says Flannagan. "They definitely want you to protect yourself against that."

Impact-resistant roofing credit: 5 percent to 10 percent.

You know that good-driver discount the auto insurance companies offer? A claims-free credit is the home insurance equivalent.

The reason is pretty simple: Your absence of claims keeps more money in your insurer's pocket. And increasingly, they're willing to pass some of that savings on to you by shaving your home insurance premium.

"That's a fairly new discount, but almost every year we're seeing more companies add it," says Flannagan. "People who have been claims-free for 10 years can get like a 20 percent discount. I think a lot of companies are trying to reward longevity."

Even if you've had a claim, you may still qualify for a long-term customer discount upon renewal if you've been insured for a certain number of years.

Claims-free credit: 20 percent.

As strange as it seems, some home insurance companies will give you credit for the company you keep -- as long as that company is in the form of a neighborhood homeowners association, or HOA.

"I've heard that it's because of the security aspects of HOA communities, with things like community watch," says Flannagan. "Plus, people may have to maintain their home in a certain way in order to meet the requirements of a homeowners association's restrictions and covenants."

You don't necessarily have to be a member of the homeowners association to take advantage of this discount; your home is simply considered less risky because of the involvement of your neighbors in keeping your community safe from thieves and vandals.

Homeowners association credit: 5 percent to 10 percent.

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