Question

The best way to reduce your homeowner's insurance premiums is to

A) insure your home for only 60% of its value, since it is unlikely to be completely destroyed.
B) drop coverage for medical payments.
C) increase deductibles.
D) eliminate liability coverage.

Answer 1

The best way to reduce homeowner's insurance premiums is to increase deductibles.

Step-by-step explanation:

The best way to reduce your homeowner's insurance premiums is to increase deductibles. The deductible is the amount that the policyholder must pay out of their own pocket before the insurance coverage starts paying. By increasing the deductible, the policyholder takes on a greater portion of the risk, which usually results in lower premiums. For example, if the deductible is $1,000, the homeowner would need to pay the first $1,000 of any claim, and then the insurance company would cover the rest.