Are you paying more than necessary for your homeowner’s insurance? Learn 9 proven ways to lower your premium, including increasing your deductible, enhancing home security, avoiding small claims, inquiring about discounts, making home improvements, bundling policies, improving credit score and more. Save money on your home insurance today

Summary

• Increasing your insurance deductible can lower your premium by reducing the amount you pay out of pocket in case of a claim.
• Simple measures to enhance your home’s security, such as installing smoke detectors, burglar alarms, or deadbolt locks, can qualify you for a 5% discount on your insurance premium.
• Avoiding filing small claims can help you qualify for discounts if you remain claim-free for a certain period of time.
• Inquire about lesser-known discounts, such as discounts for non-smokers, new homeowners, automatic bank payments, paperless billing, and certain professions.
• Home improvements, such as storm shutters and impact-resistant roofing, can make you eligible for homeowners’ insurance discounts.
• Combining your auto and home insurance with the same company can save you an average of 5-15% on your homeowners’ premium.
• Improving your credit score can have a significant impact on your home insurance premium as insurers use credit-based insurance scores to determine rates.
• Eliminating high-risk items, such as trampolines, swimming pools, and certain types of dogs can lower your premium by reducing the risk of claims.

Lower Your Home Insurance Premium: 9 Tips to Reduce Your Costs

Homeowner’s insurance may not be top of mind, but it may be costing more than necessary. Fortunately, there are discounts and incentives offered by insurers that can help lower the premium.

Here are nine ways to take advantage of these savings opportunities.

1. Increase your deductible One effective method to lower your premium is by increasing your insurance deductible, which is the amount you pay out of pocket in case of a claim. For instance, by raising your deductible from $1,000 to $2,500, you can potentially save an average of 12% annually, Increasing your deductible can help you save money every month that would have gone to the insurer. However, it’s crucial to ensure you have sufficient savings to cover a higher out-of-pocket expense in case of a claim.

2. Improve your home’s security Simple measures to enhance your home’s security can help you save money on insurance. Having a smoke detector, burglar alarm, or deadbolt locks in your home can qualify you for a 5% discount, according to Mark Friedlander, spokesperson for the Insurance Information Institute. Furthermore, incorporating a complete sprinkler system, along with an actively monitored fire and burglar alarm, may provide savings of up to 15-20%.
3. Avoid filing small claims It may be tempting to file a claim with your insurer even when something relatively minor occurs, but it’s better to pay out of pocket for these smaller expenses. This is because some insurers provide discounts if you remain claim-free for a certain period of time, which is usually a few years.
   • Filing a claim may affect your rates significantly. A recent NerdWallet analysis found that submitting a claim for wind damage raises your annual insurance cost by approximately 9% on average. A water claim may cost you even more, raising your annual rate by about 19% on average. Therefore, if your claim is relatively minor, you may end up paying more in rate increases than the insurer pays out.
4. Inquire about lesser-known discounts You may not be aware of the savings opportunities available to you unless you inquire about them. Some insurers offer additional homeowners’ insurance discounts if you:
   • Do not have smokers living in the house.
   • Have recently purchased your home.
   • Pay your premium through automatic bank payments.
   • Opt for paperless billing.
   • Work in a specific field, such as teaching, engineering, or firefighting.
5. Consider the impact of home improvements Home improvements may make you eligible for homeowners’ insurance discounts without you even realizing it. Features such as storm shutters and impact-resistant roofing, which make your house more resistant to damage, can result in insurance savings. Upgrading outdated plumbing and electrical systems may also qualify for a discount.
   • “You can often request a new inspection of your home to evaluate these improvements to maximize your potential discounts,” says Jessica Hanna, spokesperson for the American Property Casualty Insurance Association.
6. Combine your auto and home insurance Combining auto and home insurance with the same company can save you an average of 5-15% on your homeowners’ premium, according to the Insurance Information Institute. Many insurers offer discounts if you purchase multiple types of policies from them, although this may vary depending on the company.
7. Improve your credit score Your credit score can have a significant impact on your home insurance premium. This is because, in most states, companies can use a credit-based insurance score to determine your rates. If your insurer thinks your credit score is low, such as a FICO score under 630, you may pay higher rates.
   • If you find that your credit score is low, examine your credit report closely to identify any errors. You can improve your score by taking steps such as paying bills on time and reducing credit card balances. Learn more about how to build credit.
8. Eliminate high-risk items Having items deemed as “attractive nuisances” by your insurer, such as trampolines, swimming pools, or playground equipment, can add to your homeowners’ insurance premium. An attractive nuisance is a feature on your property that children could be tempted to play on, and if they get injured, you could be held legally responsible. Because insurers consider this a liability risk, getting rid of those items could save you money on homeowners’ insurance.
9. Compare prices Rates for identical homeowners’ insurance coverage can vary greatly among different companies. Some homeowners can save $1,000 or more annually by finding the lowest rate.
   • Many companies have tools on their websites that allow you to enter basic information and get instant home insurance quotes. Comparing different companies’ rates will enable you to determine if you can save by switching insurers. You can also ask an independent insurance agent or broker to compare prices for you.

Not sure where to start? See Edfed’s roundup of the most affordable homeowners’ insurance.

Conclusion

In conclusion, there are several ways to lower your homeowner’s insurance premium, including increasing your insurance deductible, enhancing your home’s security, avoiding filing small claims, inquiring about lesser-known discounts, considering the impact of home improvements, combining your auto and home insurance, improving your credit score, and eliminating high-risk items. By taking advantage of these savings opportunities, you can potentially lower your premium and save money every month. It’s important to remember that you should always ensure you have sufficient savings to cover a higher out-of-pocket expense in case of a claim, and should always compare insurance offers before making any decisions.

Questions Answered in this Article

Q: How can I lower my homeowner’s insurance premium? A: One effective method to lower your premium is by increasing your insurance deductible. Additionally, simple measures to enhance your home’s security, avoiding filing small claims, inquiring about lesser-known discounts, considering the impact of home improvements, combining your auto and home insurance, improving your credit score, and eliminating high-risk items can all help lower your premium.

Q: Can increasing my insurance deductible lower my premium? A: Yes, increasing your insurance deductible can lower your premium. For instance, by raising your deductible from $1,000 to $2,500, you can potentially save an average of 12% annually.

Q: What home improvements can qualify me for homeowners’ insurance discounts? A: Home improvements such as storm shutters and impact-resistant roofing, which make your house more resistant to damage, can result in insurance savings. Upgrading outdated plumbing and electrical systems may also qualify for a discount.

Q: How can I save money on my home insurance by improving my home’s security? A: Simple measures to enhance your home’s security can help you save money on insurance. Having a smoke detector, burglar alarm, or deadbolt locks in your home can qualify you for a 5% discount. Furthermore, incorporating a complete sprinkler system, along with an actively monitored fire and burglar alarm, may provide savings of up to 15-20%.

Q: Can combining my auto and home insurance with the same company save me money? A: Yes, Combining auto and home insurance with the same company can save you an average of 5-15% on your homeowners’ premium.