How to save on home insurance

The cost of home insurance is rising. According to J.D. Power, nearly half of homeowners in the U.S. experienced a home insurance rate increase over the last year. 

Several factors are contributing to higher homeowners insurance costs, including an uptick in claim frequency, economic factors such as inflation, rising building and labor costs, and increasing home values. Even with these ongoing trends, you might still be able to lower your insurance bill by trying out a few smart strategies.

How to lower your home insurance premium

The amount you pay for an insurance policy is called your premium. If you think you’re paying too much for homeowners insurance, here are some ways that you might be able to save on premiums. 

1. Raise your deductible

Home insurance policies typically come with deductibles. Your deductible is the portion of claimable damage that you’re responsible for paying for out of pocket; insurance will cover the rest, up to your policy limit. Common deductibles range from $1,000 to $5,000. You can choose the amount you’re comfortable with when setting up your policy. If you select a higher deductible, you’ll pay less in premiums, so raising your deductible can help save money on policy costs. However, it’s crucial to choose a deductible that you can easily afford to pay if you need to file a claim. 

2. Bundle your policies

One of the most effective ways to save money on insurance is to purchase multiple insurance products from the same company, a practice known as bundling. If you buy home insurance and car insurance, for instance, you can often qualify for a generous discount. Working with the same insurance company can also make it easier to manage your policies, make payments, and file claims. 

3. Look for discounts

Many insurers offer homeowners insurance discounts to customers who meet certain criteria. Available discounts vary by company, but you can often qualify for savings by avoiding claims, remaining a loyal customer, paying your entire premium upfront, signing up for paperless billing, or purchasing a newly constructed home. When choosing an insurance company, look for insurers that offer multiple discounts for which you may be eligible to maximize your savings.

4. Install safety equipment

You can sometimes qualify for a lower home insurance premium if you install certain safety devices or equipment in your home. For example, some insurers provide discounts if you install a home security system, fire alarm system, or fire sprinklers. You might also qualify for a discount if you have smart home devices, like a water leak detector or automatic water shut-off valve, which can reduce the likelihood of an expensive claim. 

5. Make home improvements

While home improvements come at a cost, they can often help you save money on home insurance. For instance, if you live in an area that’s prone to hurricanes, your insurer might lower your premium if you install storm shutters or impact-resistant glass windows. If you live in a wildfire zone, consider installing a new roof with fire-rated materials, replacing wood siding with non-combustible siding, or getting tempered glass windows. 

6. Remove attractive nuisances

If there are things on your property that could be dangerous, especially to unsupervised kids, those are called "attractive nuisances." Common examples are pools, hot tubs, playsets, and trampolines. Having these types of hazards on your property can lead to more expensive premiums, whereas removing them will likely lower your insurance costs.

7. Maintain strong credit

In most states, insurance companies consider your credit history when calculating homeowners insurance premiums. Typically, homeowners with excellent credit pay the lowest rates because they’re statistically less likely to file claims than people with poor credit. If you don’t have great credit, improving it could help you get a lower premium. Focus on making on-time bill payments, paying off balances in full each month, and lowering your credit utilization.

8. Consider the impact of claims

Your insurance claim history is another significant factor that affects the cost of home insurance. In most cases, home insurance premiums increase after a claim. If you’ve filed multiple home insurance claims in the past, it’s likely that you’ll pay a higher rate than someone with no prior claims.

9. Review your coverage

The types of home insurance coverage you choose and the coverage limits you select have a major impact on your home insurance premium. That’s why it’s a good idea to review your coverage every year to make sure you’re not overpaying for coverage that you no longer need. For example, if you added a scheduled personal property endorsement to insure jewelry or art you no longer own, you could drop that coverage and save some money on your premium. 

10. Compare quotes

The cost of home insurance depends on many factors, including the insurance company you work with. Insurers weigh rating factors differently and therefore charge different rates for the same coverage. To find the company that can offer you the best deal, compare quotes from several insurers. However, before you decide to switch companies, ensure that the lower-cost policy still offers the coverage types and policy limits you need.

Frequently asked questions

What is the quickest way to lower home insurance?

Some of the quickest ways to lower your home insurance premium are to raise your deductible and update your coverage with lower limits. You might also be able to save money quickly by choosing to pay your annual home insurance premium in full and asking your insurer about discount opportunities. 

Does paying off my mortgage lower my home insurance?

Paying off your mortgage doesn’t directly lower your home insurance premium. But you might be able to lower your coverage limits or drop certain coverages that your lender required, which could reduce your costs. Since home insurance isn’t required by law — but is almost always required by lenders — you can even drop coverage altogether if your home is paid off. However, insurance professionals don’t recommend doing so since a total home loss would be a huge financial burden for most people.

How often should I compare home insurance quotes?

It’s typically recommended to compare new home insurance quotes once per year, around the time your policy is up for renewal. However, it can also be beneficial to seek out new quotes after certain events, such as a major home improvement project, getting married, or filing a claim.