(MONEY Magazine) – Two years ago we set out to update our homeowners insurance coverage and save some bucks in the process. Were we surprised! By shopping around for the best policy and taking advantage of a few discounts that we'll tell you about, we cut our annual premium by 50%. If you already have homeowners coverage or are looking to buy your first house and purchase a policy, you too can save a bundle. Here are seven ways to cut your homeowners premiums:

1. Shop around for an inexpensive policy from a financially strong insurer. Get premium quotes from agents representing at least six insurers. The agents can be independents, who represent a number of companies, or salesmen who work for a single insurer. Because nearly 60 property/casualty insurers have gone under since 1990 and some others are financially shaky, however, it's essential to be confident your company will be around if you need to make a claim. Stick with insurers who get top grades from the major ratings services --for example, at least AA from Standard & Poor's or A+ from A.M. Best. A few insurers now blessed with such ratings are Chubb, Geico, Hartford, St. Paul and USAA. Tell the agents you want the following: 100% replacement-value coverage for your home and contents, so the insurer would pay what it would actually cost to rebuild your home or buy new belongings; inflation protection, which automatically increases your coverage periodically to keep up with the cost of living, and umbrella liability coverage for $1 million, which pays for bodily injury or property damage caused by you or a family member. If you live in a flood zone or an area prone to earthquakes, buy coverage against such natural disasters. It's sad that, at most, 20% of people who live in areas damaged by the brutal Midwest floods have federal flood insurance, even though it costs only about $320 a year for a $100,000 house. Earthquake insurance runs about $300 to $400 on a similar-priced home. 2. Increase your annual deductible. You can cut your premium up to 15% by raising the amount you agree to pay out of pocket before any insurance reimbursement from the standard $250 to $1,000. / 3. Seek discounts for being a loyal customer. Some insurers offer 5% savings for people who have had policies with them for three to five years and 10% off for customers with longer records. 4. Don't pay for floaters you don't need. A floater is a separate policy that provides extra insurance for valuables; the standard homeowners policy covers jewelry and furs up to a total of $1,000 or so and flatware up to $2,500. Floaters are usually priced per $1,000 of insurance: $4 per $1,000 for furs, $5 per $1,000 of value for silverware and $15 per $1,000 for jewelry. If you bought a floater for a $5,000 fur coat you got five years ago but have since donated the fur to charity, make sure your insurer is no longer charging for the coverage. 5. Get a break for making your house safer. Many insurers reduce premiums by between 2% and 10% if you install burglar alarms and take off another 2% for smoke detectors throughout the house. 6. New-home owners should ask about any special breaks. Some companies lower premiums by 5% to 20% for customers whose homes are less than five years old, says Barbara Taylor, author of How to Get Your Money's Worth in Home and Auto Insurance (McGraw-Hill, $12.95).

7. Ask about savings for insuring your home and your car with the same company. Some insurers lower homeowners premiums by 5% to 15% for policyholders who double up this way. Before signing up, however, be sure that the insurer's auto insurance premium is fairly priced. Otherwise, you could be overpaying to cover your car just to get a "break" on your homeowners. And that's no savings at all.