There is a decent chance you may be paying too much for homeowners insurance.

Insurance experts point to a Florida inspection program earlier this year that found 56% of homeowners weren’t receiving discounts they were entitled to from their insurance company.

While the results were confined to one state, the problem is widespread, says former Texas Insurance Commissioner Robert Hunter.

‘’Homeowners often end up paying more for insurance than they should,’’ said Hunter, who serves as Insurance Director of the Consumer Federation of America.

In Florida, officials found that owners of 56% of the 391,000 homes inspected were entitled to savings averaging $220 a year from their insurer—but weren’t receiving anything.

“During these difficult economic times an extra $220 in your pocket can go a long way, ‘’ says Florida’s Chief Financial Officer Alex Sink.

Savings would be helpful for many hard-pressed home owners. The average homeowner insurance premium in the U.S. was $802 in 2006, the last year for which statistics were available, but it’s not uncommon for coastal residents to pay thousands of dollars a year for insurance.

Florida homeowners were undergoing the state-authorized inspections to get recommendations on how to harden their homes from hurricanes and qualify for insurance discounts. But Sink said the majority houses inspected already had features such as a more wind-resistant hip roof (shaped on all sides like a pyramid) that should have resulted in premium breaks.

Unfortunately insurance agents don’t always tell consumers about discounts, Hunter says. “They can be lazy or incompetent,” he says. ‘’It’s up to the home owner to question the agent about discounts.’’

What You Need to Know to Save

In any case, a little knowledge before you buy or renew a policy can be helpful in defending your rights to get available discounts, insurance experts say.

For example, homeowners can also usually receive discounts of at least 5% for a smoke detector, burglar alarm or dead-bolt locks, says Loretta Worters, vice- president of Communications for the Insurance Information Institute. Worters also says some companies may cut your premiums by as much as 15 to 20 percent if you install a sophisticated sprinkler system, fire and burglar alarm.

But these discounts aren’t guaranteed. “These systems aren't cheap and not every system qualifies for a discount,” says Worters. “Before you buy one, find out what kind your insurer recommends, how much the device would cost and how much you'd save on premiums.”

Confusing the matter of discounts even further, insurers operate on a state by state basis. Companies don’t necessarily offer the same discounts in every state. So in a few states you can save money by reducing the coverage for possessions inside your house, but in most states you’re stuck with what the insurance company gives you, even if your possessions are worth next to nothing.

More universal discounts offered by companies include reducing premiums by 10% if the homeowner is at least 55 years old and retired, or for renovations, such as modernizing the plumbing or electrical system.

To get the best premium, homeowners also need to make sure that they don’t confuse the price of their house with the rebuilding costs. “The land under your house isn't at risk from theft, windstorm, fire and the other perils covered in your homeowners policy,” Worters says. “So don't include its value in deciding how much homeowners insurance to buy. If you do, you'll pay a higher premium than you should.”

According to Hunter, the best way to determine your home’s replacement value may be to hire an adjuster or building professional who can determine how much it would realistically cost to rebuild. While insurance agents will provide their own estimate, Hunter said they may not always be reliable, particularly for unique or custom built homes.

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