Kevin McCormally: I am Kevin McCormally of Kiplinger's and I am here with Pat Esswein, Associate Editor of Kiplinger's Personal Finance magazine to talk about ways to save on your Home Owner's Insurance. Pat, we have got hurricanes, we have got tornadoes, insurance premiums seem to be going through the roof. What can people do to hold down their cost?

Pat Esswein: Well, one of the first things that you can do is to remember that when you are insuring your home, you are insuring the dwelling, the house, not the property, so you don't want to buy home owner's insurance for the market value of the property, just, just the cost to replace the house.

Kevin McCormally: I don't need to insure the cost of the lot which is going to be there even after the fire.

Pat Esswein: That is what you hope so.

Kevin McCormally: Okay, what else can you do to save money?

Pat Esswein: One of the things that you can do is to buy both your home owners and you car insurance from the same insurance company. You can also take the highest deductible that you can afford.

Kevin McCormally: How much could you save if you increase the deductible, say from $250 or $500 upto a $1000?

Pat Esswein: Well in one example based on the Chicago area, on a $200,000 house if you raised your deductible from $250 to a $1000, you would save about a $150 dollars per year on your premium.

Kevin McCormally: Okay, I understand, another advantage of that is if you put the $1000 deductible, you are not going to be filling for these small claims and that's a benefit too.

Pat Esswein: Absolutely, once you have your policy, it's wise to file claims as seldom as possible. The more claims you file, the more likely that your insurance company will raise your premiums.

Kevin McCormally: What's this deal about dogs? Is it true that the kind of dog you own can actually affect what you pay for home owner's insurance?

Pat Esswein: Absolutely, some dogs have -- some breeds of dogs like Pit Bulls is an obvious example, have a bad record of incurring liability expense, so it's smart to get a dog that doesn't have a bad record.

Kevin McCormally: Thank you very much.

Pat Esswein: You are welcome.
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