There is no short answer to this question, because there are lot of things you can do to reduce your insurance premium. We will discuss 3 basic categories: Non-Coverage Related, Auto and Home issues.

Non-Coverage related activities that will reduce your premiums:

1. Improve your credit score. Insurance companies generate a Risk Score from the same credit data that is used to create your credit score. Although risk scores and credit scores use your credit data in different ways, there are some similarities. In GENERAL, individuals with better risk scores or high credit scores have fewer claims than those who have lower credit or risk scores. (Note: There are exceptions to this.) Individuals with fewer claims represent a lower risk to an insurance company and the insurance company will charge lower rates accordingly. That is why most insurance companies run risk scores on their clients. See the Blog posting titled Credit Scores and Insurance Rates.
2. You can also show the insurance company you are a good risk in other ways. For Autos that could mean, drive safely. Particularly minimize distractions, anticipate changes in road conditions, don’t speed etc. For homeowners, don’t keep a dog which has a high probably of biting someone, or don’t have an attractive nuisance such as a pool, pond or trampoline.
3. Living in an area with low traffic density such as a small town or in a rural area will usually reduce your auto premium. But it may increase your homeowner’s premium if the fire department has a low rating.
4. For some people, completing a driver safety course will help.
5. For youthful drivers, get a good student discount.
6. Have all of your insurance with one agency / company. This will give you multi-policy discounts.
7. Drive less.
8. Participate in a program which monitors your driving habits. A number of companies have smart phone or device specific applications which monitor your driving. Those systems keep track of acceleration, braking, speeding etc to determine if you are a safe driver.
9. Pay the full-term premium. Monthly or other payment programs will cost you more.
10. Some companies offer long term customer discounts.

Coverage related issues which could reduce your auto premiums.

1. Lowering your coverage amounts. This has significant pros and cons.
2. Increasing your deductibles. Deductibles are the small losses you will pay for a claim. If you have a $1000 collision deductible and you cause $6000 of damage to your car, you pay the first $1000 and the company pays $5000. A higher deductible means you are accepting more of the risk and the insurance company gets less of the risk. Therefore your premium will be lower. So, is a higher deductible a better deal since you are taking a bigger share of the loss? Check out the blog How high should my deductible be?
3. Participate in a Risk Management Review to look for unnecessary coverages you can remove or find different ways to manage some risks. Look for duplicate coverage from other services. For example if you have towing on your auto policy and a towing package with someone else, one of them can be eliminated.
4. Consider removing comprehensive and collision coverage on older vehicles.
5. Some hybrid vehicles get a discount.
6. Get a quote on a particular vehicle before you purchase it. Some vehicles are more expensive to insure than others.

Coverage related issues which could reduce the premium on your home.

Note: There are basically two kinds of insurance companies who insure homes and property. Preferred and Standard companies. Preferred companies have very strict standards regarding property maintenance, trash, debris, claims history etc. They have lower premiums as a result.

1. Increase your deductibles. See the section above and the blog posting How high should my deductible be? for more info.
2. Customizing your coverages for such things as contents, separate structures, loss of use etc. Many of the default coverages on a homeowners policy are very generous and provide far more coverage than many families need.
3. Participate in a Risk Management Review to look for unnecessary coverages you can remove or find different ways to manage some risks. Look for duplicate coverages from other services.
4. Don’t file small homeowner’s claims. Save your insurance for the big claims. (Note: This is another reason to have a higher deductible.) Filing a claim often leads to claims surcharges on your premium. Too many claims in a short period of time could cause your policy to be non-renewed. Then you would not be eligible for a preferred company with a lower rate.
5. Maintain your property so you are eligible for a preferred insurance carrier. Remove old structures on your property that could cause a claim and are not worth insuring. Also, get rid of any debris, trash etc.
6. Add home security. As a minimum install deadbolts, a fire extinguisher and smoke alarms in your home.  (Note: the reduction in homeowners rates will probably not pay for the monthly charge for a monitored security system.)
7. Purchase a home in an area that is not prone to flooding. You can check with your bank before you purchase a home to see if the new home is in a high flood prone area. If you are in certain flood zones and apply for a loan, Federal Law mandates that you have Flood Insurance that is issued by the National Flood Insurance Program. Your mortgagee will require it as a result. Flood insurance is an additional policy, it is rather expensive and has limited coverage. If the home you are considering is in a low area or near a waterway (creek, river etc.) you might ask the existing owner if they have flood insurance.
8. Do things that will minimize the possibility of a claim. For example: install a back up sump pump system if you have a sump pump to minimize the possibly of your basement flooding. This could be a battery backup or a venturi style system which uses your cities water supply as a pumping mechanism. This could prevent an expensive claim. See the blog post titled How can I minimize the possibility of water damage to my home? for more information.

There is another cost associated with your insurance policy that is not discussed in this blog. That is the cost of using the liability portion of your policy. This can be a very very expensive claim. See the Blog post titled What is the REAL Cost of Your Insurance Policy?

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