Everyone in America is looking at their budgets and wondering how to cut costs. Most do not look at their homeowner’s insurance because the cost is built into their mortgage payment and paid directly by the lender. However, there is no reason not to do a review to make sure you are not over-paying for insurance and have the coverage you need as well.

Make sure your home is valued correctly. In the past decade or so, home prices went down in many areas of the country, but now are soaring. If you are paying for coverage you don’t need, or don’t have enough coverage, then you should make an adjustment. Remember that the value of the land may have moved more than the value of the home and this may mean that insurance coverage will not need to be adjusted as much as you think.

Make sure the land is not covered. The land under your house isn’t at risk from theft, windstorm, fire and the other perils covered in your homeowner’s policy. So don’t include its value in deciding how much homeowner’s insurance to buy. If you do, you will pay a higher premium than you should.

Consider raising your deductible. The higher your deductible, the more money you can save on your premiums. If you can afford to raise your deductible to $1,000, you may save as much as 25 percent. Remember, if you live in a disaster-prone area, your insurance policy may have a separate deductible for certain kinds of damage.

A larger deductible may have another benefit. By handling smaller claims yourself, this will improve your long-term insurance claim records and help you avoid paying for a premium on your insurance based upon history.

Combine policies. Some companies that sell homeowners, auto and liability coverage will take a certain percentage off your premium if you buy two or more policies from them.

Defend your home against disaster. Find out from your insurance agent or company representative what steps you can take to make your home more resistant to windstorms and other natural disasters. You may be able to save on your premiums by adding storm shutters, reinforcing your roof or buying stronger roofing materials. In addition, consider modernizing your heating, plumbing and electrical systems to reduce the risk of fire and water damage.

Get Safer. You can usually get discounts for a smoke detector, burglar alarm or dead-bolt locks. Some companies offer to cut your premium further if you install a sophisticated sprinkler system and a fire and burglar alarm that rings at the police, fire or other monitoring stations.

Improve your credit.  Establishing a solid credit history can cut your insurance costs. Insurers are increasingly using credit information to price homeowner’s insurance policies. Check your credit record on a regular basis and have any errors corrected promptly so that your record remains accurate.

Be loyal. If you’ve kept your coverage with a company for several years, you may receive a special discount for being a long-term policyholder.

Plan ahead when you shop for a home. You may pay less for insurance if you buy a house close to a fire hydrant or in a community that has a professional rather than a volunteer fire department. It may also be cheaper if your home’s electrical, heating and plumbing systems are less than 10 years old. Remember that flood insurance and earthquake damage are not covered by a standard homeowner’s policy.

Today you can’t afford to pay more than you should and homeowner’s insurance is no exception. This is the time to make adjustments.

Sources: Insurance Information Institute, MSN Money and Motley Fool