With household budgets feeling the pinch from inflation and rising interest rates, many homeowners are looking for ways to cut expenses in 2025. A frequently overlooked area for potential savings is your home insurance premium. Homeowners insurance costs have been on the rise across the country, meaning that lowering your premium could significantly impact your budget. But how can you achieve these savings without compromising the protection you need? Leading insurance experts offer these valuable tips.
Key Strategies to Reduce Your Home Insurance Costs
Home insurance is designed protect your house, personal belongings, and protect you from liability due to unexpected losses. Here’s a breakdown of effective methods to lower your premium:
1. Evaluate Your Home’s Value
“Sometimes, the value of your home plus the inflation guard outpaces actual inflation—and your home can be overvalued,” Ashleigh Trent, personal lines director and co-founder of Tower Street Insurance, explains. Homeowners should review their home replacement cost every five to seven years to ensure they are not overpaying for coverage.
2. Customize Coverage for Other Structures
Other structures coverage extends your protection to items on your property other than your main house, such as sheds and detached garages. “If you live on a small lot or have a large home with very few additional structures, you could look to decrease that limit,” Trent advises. However, it is important to understand that some carriers offer adjustable limits, while others have fixed percentages.
3. Inquire About Discounts
This is generally the easiest method to lower your home insurance premium. Many insurers supply discounts that might not be widely known, often including discounts for retirees, non-smokers, or new homebuyers. Additionally, you could be eligible for reduced rates if you pay your premium annually instead of monthly and opt for automatic payments.
4. Invest in Loss Prevention Measures
“The best claim is one that never has to happen, so take precautions to limit your loss exposure,” Trent emphasizes. Insurance discounts are often available on homes that have built-in safety features such as hail-resistant shingles or interior sprinkler systems. Even with an existing home, it’s possible to qualify for savings. Installing burglar alarms, fire monitoring systems, and automatic water shut-off devices are among the most cost-effective upgrades. “These lower the chances of filing claims, which insurers appreciate and benefit you with lower rates,” says Brent Thurman, owner of Keystone Insurance.
5. Protect Your Claims History
Insurance companies prioritize how often you file claims. “Most carriers do not offer a quote to people with three or more claims within five years,” Trent warns. She suggests managing smaller losses yourself to avoid creating a claims history, since filing minor claims can lead to higher premiums.
6. Increase Your Deductible
A higher deductible generally results in a lower premium. Industry experts suggest a deductible between $1,000 to $2,500 to keep the premium reasonable. However, it is very important that you choose a deductible that you can meet if a disaster does cause you to file a claim.
7. Bundle Your Policies
Bundling home and auto insurance is common, but, according to Trent, “some carriers provide additional discounts for having a valuable articles policy and an umbrella (excess liability) policy.” Ask your agent about all bundling options to maximize savings.
8. Contact an Independent Agent
Independent agents represent the customer’s interests in the insurance market, and some carriers only offer rates through independent agents. They are able to access exclusive markets, compare numerous policies at once, and find discounts that you could overlook.
9. Improve Your Credit Rating
Trent says that many carriers closely tie rates to a person’s Insurance Bureau Score or financial credit rating. Improving your credit can help lower your premium, so focus on paying bills on time, reducing credit card balances, and reviewing your credit report for errors to boost your credit score.
10. Be Mindful of Liability Risks
Features like swimming pools, trampolines, and playing equipment increase insurance premiums due to their accident risk. Insurance companies consider these “attractive nuisances” because they might attract people to your home, which can lead to an injury claim. Consider this added cost when deciding whether to install such features.
The Bottom Line
Besides the tips mentioned above, a particularly effective strategy is to compare home insurance quotes from several different carriers. Insurance companies offer varying rates and discounts for the same coverage. Get quotes from at least three carriers to potentially save hundreds on your premium while maintaining ample protection. Finally, review your insurance plan every year. “Make sure you’re not paying for things you don’t need or that you’re not underinsured because your property’s value has increased,” Thurman advises. Inform your agent about home improvements or lifestyle changes potentially qualifying you for new savings.
