There are several ways you can save on your homeowner's insurance policy. One way is to insure your home for less than it's worth -- that should easily lower your premiums. But that's a dumb way to save, as it defeats the purpose of insurance, which is protecting you against a financial loss.

Here are some better approaches:

  • Buy just as much insurance as you need, and no more. Ask yourself how much it would cost to replace your personal property, rebuild your house, or buy another like it in the same neighborhood.

  • Look into discounts. Some policies offer them for burglar alarms, deadbolt locks, and perhaps some construction features. You can often also get a discount if the same insurer is covering your home and your car.

  • Increase your deductible. If you don't expect to file claims very often, then the higher the deductible, the more you'll save each year on your premiums. (Just make sure you can afford to pay the deductible if and when the need arises.)

  • Comparison shop. Contact agents from a variety of companies and also do a little shopping online.

Learn more about insurance in our Insurance Center. You may not have thought about some kinds of insurance, such as disability or long-term care insurance, but they're vital for many people. Take a little time to learn more, and you may be very happy you did if some calamity occurs in the future.

And by the way, if you've got short-term money to invest, learn how to make the most of it in our Savings Center (which offers Fools some special deals on interest rates).