Wise Money Tips
Homeowners Insurance

7 Ways to Lower Your Homeowners Insurance Costs

Are you paying too much for homeowners insurance? Premium costs are on the rise. In 2010, homeowners spent an average of $909 per year, according to the Insurance Information Institute. By 2019, that number had shot up to $1,272.

With premiums on the rise, getting the best deal possible is critical. And you can pull it off by starting with these seven easy moves.

What Factors Into Your Homeowners Insurance Rates?

Homeowners insurance companies consider several factors to determine your premium rate.

  • Your area: Homes in areas with higher crime rates or higher likelihoods of natural disasters, like hurricanes or wildfires, typically have higher insurance premiums.
  • Type of house: Older homes may have higher premiums because they are more likely to have structural or electrical problems.
  • Cost of your home: Homes that are more expensive to replace will generally have higher premiums.
  • Coverage levels: Policies with more coverage often have higher premiums, while policies with less coverage often have lower premiums.
  • Your credit score: Insurers often use credit scores to assess the risk of insuring you, with lower scores correlating to higher risk and premiums.

See if you’re getting the best rate possible with our Homeowners Insurance Comparison tool.

Research a Home’s Past Before You Buy

Before you purchase a home, it's a good idea to investigate its past claims history. The Comprehensive Loss Underwriting Exchange (CLUE) report can help you do this. The CLUE report records any claims made on the home within the last five years. This report can give you an idea of the home's potential risks and help you determine what insurance premiums you may pay.

Raise Your Deductible

Raising your deductible may lower your premiums. The deductible is the amount you pay out of pocket before your insurance policy kicks in to cover the remaining costs of a claim. When you raise your deductible, you agree to pay a higher amount out of pocket, and as a result, the insurance company takes on less risk. This lower risk to the insurance company means they can charge you a lower premium.

Remember, you will be responsible for paying more out of pocket if you file a claim. For this reason, it's essential to have enough savings set aside to cover the higher deductible if needed.

Bundle Your Insurance Policies

Bundling your homeowners and auto insurance with the same insurer can also help you save money. Many insurance companies offer multi-policy discounts.

However, it's essential to compare rates between different insurance companies. You may find a better deal by choosing another provider for your auto and homeowners insurance than by opting for a bundle discount.

Ready to compare rates? Receive quotes from multiple providers fast with our Homeowners Insurance Comparison tool.

Hunt Down Discounts

Many insurance companies offer discounts for homeowners insurance. For example, senior citizens, first responders, military members and teachers are often eligible for a discount. You may also qualify if you’re a credit union member or work for certain companies.

Be sure to ask your insurance agent about any discounts available to you.

Theft and vandalism account for a lot of homeowners insurance claims. Improving your home’s security can net you a discount. Installing an alarm system, deadbolt locks or video camera surveillance can make your home less of a target for burglars, reducing the risk to your insurance company (and you).

Make Your Home More Disaster Proof

Like installing security features, making your home safer against natural disasters like hurricanes, earthquakes and floods can also help you save on insurance premiums. For example, installing hurricane shutters or reinforcing your roof can make your home more resilient to hurricanes. Likewise, elevating your home or installing flood barriers can make your home safer in the event of a flood.

Compare Rates

No two homeowners insurance policies are created equal — and neither are the premiums. Compare homeowners insurance rates against several companies to ensure you’re getting the best coverage for your money:

Gather information: Start by gathering basic information about your property, such as its location, age, construction, square footage and any safety features like smoke detectors or security systems.

Research insurance companies: Look for insurance companies in your area. Check out their websites and read reviews from current and former customers to understand their reputation and customer service.

Determine coverage needs: Decide what coverage you need for your home, including coverage for the structure of your home, personal belongings, liability protection and additional living expenses if you need to relocate due to damage or repairs temporarily.

Get quotes: Request quotes from several insurance companies, providing them with the information you gathered. Ensure you get quotes for the same coverage and deductible amounts from each company.

Compare rates: Compare the rates to see which company offers the best value for your needs. Look beyond the cost and consider factors such as customer service, reputation and coverage options.

Review policy details: Once you choose an insurance company, review the policy details carefully before making your final decision. Ensure you understand the coverage limits, deductible and any exclusions or limitations in the policy.

Want to take the legwork out of rate shopping? Our Homeowners Insurance Comparison tool can help you quickly compare rates between several insurance companies to save time and skip the hassle.