Homeowners insurance: Save money in 2020

You are probably paying too much for homeowners insurance coverage.

Each year, most Twin Cities-area homeowners let hundreds of dollars slip through their fingers because they buy coverage with high-priced companies. Nonprofit consumer group Twin Cities Consumers' Checkbook collected price quotes from major insurers for three local families and found each could save more than $1,000 per year by choosing a low-priced company over a high-priced one.

For example, for essentially the same coverage, Checkbook's Ramsey County family (Colonial-style Roseville home with three bedrooms and one and a half bathrooms built in 1938; $528,000 replacement cost; 2,600 square feet of living space) would pay only $1,619 with Selective or $1,668 with Safeco, but pay more than $3,000 per year with AAA, Homesite, Nationwide, State Farm or USAA. To help you find a low-cost, high-quality company, Star Tribune readers can access Checkbook's ratings of homeowners insurance companies for free through April 5 via Checkbook.org/StarTribune/homeowners.

Because pricing methods and premiums can dramatically change over time, shop around for a better rate every other year or so. And if you are considering an insurance switch, know that you don't have to wait until your policy term ends to sign on with a lower-priced company: Although you might have to pay a small administrative fee to cancel your current insurance, this fee is usually much less than the savings you will get from a lower-cost carrier.

Even if you select a low-priced company, don't waste hundreds of dollars a year buying the wrong coverage. Some tips on minimizing premiums:

• Take a high deductible. You will get a big discount, and it will make you less likely to file small claims that may generate future premium hikes. Keep in mind that the purpose of insurance is to protect you from losses that you can't afford to cover yourself.

• Obtain an accurate estimate of what it will take to rebuild your home. Many homeowners leave themselves financially vulnerable in the event of a total loss. Don't count on your insurer to keep your homeowners policy up to date. Every few years have your insurer re-estimate your home's replacement cost and then adjust your coverage as needed.

• Maintain a good credit record. With many companies, your credit score will influence the rates you are offered more than anything else. The prices most companies offer customers with poor credit are double what people with excellent credit get.

• Consider declining optional higher coverage limits and other add-ons. Be wary of agents and companies that try to tack on extras without discussing them with you first.

• Consider buying your homeowners and auto policies from the same company. Many companies offer dual-policy discounts to customers who insure both their homes and cars with them, but make sure it's worth it.

Keep in mind that what companies sell as their standard insurance policies varies, so make sure you are comparing prices for the same coverage.

Consider that what you get with basic coverage is particularly important if you own an older home, where you might want to make sure expensive-to-replace features like woodwork are properly covered. Standard policies promise to repair or replace what is damaged, but not to pay for an exact replica of what was lost.

Document features of your home and keep the list up to date. Promptly report improvements to your insurer. Keep pictures or videos of your belongings in a safe place away from your home. Being able to prove the value of your home and belongings will ensure that you will be fairly compensated in the event of a loss.