Here are 6 tips to get cheap homeowners insurance.

1. Consider raising your deductible. This is a quick and easy way to reduce the cost of your insurance. If you have a $500 deductible, consider raising it to $1000, if it saves you enough money.

2. Consider reducing your dwelling coverage. If you owe less than the house is insured for, you have the option to reduce the amount of coverage you carry. As long as your house is insured for at least what you owe on it, your lender will not care. Reducing the dwelling coverage will reduce the premium.

3. Eliminate non-essential coverage. Review your policy and consider getting rid of non-essential coverage such as extra jewelry floaters or other costly extra optional endorsements.

4. Go to ACV. Actual cash value (ACV) means that depreciation is deducted from claims. ACV coverage on a roof is much cheaper than covering the roof at full replacement cost. This will save money.

5. Shop around: In many cases, an insurance company will attempt to gain market share in a state by offering rates that are much lower than competing insurance companies. Take advantage of this and switch to the company offering the cheap homeowners insurance.

6. Take advantage of package discounts: Most insurance companies will offer significant discounts if you will write your home and autos together as a package. Getting a package deal can give you some cheap homeowners insurance.

Reinsurance refers to the way one insurance company agrees, for a certain premium paid, to take responsibility and reimburse another insurer against all or part of the losses. The company seeking insurance is termed as the ceding insurer and the one offering a cover is called a reinsure. This arrangement makes sure that no insurance entity faces a financial burden that it has no means to repay. Reinsurance can be purchased for the life or for a particular period such as for a year etc.

Insurance companies in general go for aggregate stop-loss reinsurance or excess-of-loss reinsurance. When the aggregate losses for a group are well above some expected level, the insurance carrier would not have set a premium high enough to cover the losses. That is when aggregate stop-loss reinsurance is useful for them. Companies that have a self-insurance health plan as well as insurance companies use excess-of-loss reinsurance when the expenses of an individual exceeded certain set limits.

Before companies go for reinsurance they have to carefully analyze if they need reinsurance, what type of reinsurance is appropriate for them, the level of reinsurance needed, and who to get it from. They need reinsurance in case of natural calamities such as tsunamis, floods, tornado, hurricanes, fire, earthquake, or man made tragedy like September 11 strike of the twin towers. They may use it to even out claim patterns as they may peak unexpectedly at times. It also helps insurance companies absorb higher losses as well as issue more policies. Ceding companies may assume greater risk than is possible considering their size, offering policyholders larger limits of coverage than possible with its own capital. Risk transfer is the main reason why several insurance companies opt for reinsurance.

Reinsurance reduces the capital needed to provide coverage, helps increase surplus as it reduces the amount of net liability. Insurance companies function better, knowing that they are covered, in case the unthinkable happens and the companies face a multitude of claims at the same time. Since the September 11 tragedy reinsurance has assumed a greater significance as also reinsurance companies are seeking ways to protect themselves from facing bankruptcy as many reinsurance firms did due to the tragedy.