With household budgets feeling the strain of inflation and rising interest rates, many homeowners are searching for ways to cut expenses. One often-overlooked area for potential savings is your home insurance premium. Home insurance costs have been increasing nationwide, so reducing yours could have a significant impact on your budget. But how, exactly, can you do that?
Here, leading insurance experts share their best tips to help you lower your monthly costs without compromising your essential coverage.
10 Tips for Lowering Your Home Insurance Premium
Home insurance protects your house, belongings, and liability against unexpected losses. While this coverage is critical, your premiums also include costs you might be able to control or reduce based on your needs. Here are some effective ways to save money on your insurance premium:
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Check Your Home Value: “Sometimes, the value of your home plus the inflation guard outpaces actual inflation – and your home can be overvalued,” says Ashleigh Trent, personal lines director and co-founder of Tower Street Insurance. She encourages homeowners to check their home replacement cost every five to seven years to ensure they’re not overpaying.
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Customize Your Other Structures Coverage Limit: Other structures coverage protects anything on your property besides your main house, such as sheds, fences, and detached garages. “If you live on a small lot or have a large home with minimal other structures, you could look to decrease that limit,” Trent advises. However, Greg Martin, president of Think Safe Insurance, notes that some carriers allow adjustments to match your needs, while others have fixed percentages.
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Ask for Discounts: This is one of the simplest ways to save on your home insurance. Many insurers offer discounts you might not know about, such as deals for retirees, non-smokers, or new homebuyers. You might also qualify for reduced rates if you pay your premium annually instead of monthly and set up automatic payments.
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Invest in Loss Prevention Measures: “The best claim is one that never happens, so take precautions to limit your loss exposure,” Trent says. Some insurance discounts come from built-in features like hail-resistant shingles or interior sprinkler systems. You can still qualify for savings on an existing home. Installing burglar alarms, fire monitoring systems, and automatic water shut-off devices are among the most cost-effective upgrades. Brent Thurman, owner of Keystone Insurance, says, “These lower the chances of filing claims, which insurers appreciate [and benefit] you with lower rates.”
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Protect Your Claims History: Insurance companies focus more on how often you file claims than how much they pay out. “Most carriers will not offer a quote to people with three or more claims within five years,” Trent warns. She suggests handling small losses yourself to keep them off record, as filing minor claims can cost more in premium increases than paying out of pocket.
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Increase Your Deductible: A higher deductible typically means lower premiums — with $1,000 to $2,500 being the most cost-effective, according to Martin. Balance is crucial when picking a deductible. Thurman points out, “You want to choose an amount that saves you money upfront but won’t be too expensive if disaster strikes and you need to make a claim.”
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Bundle Policies: While most people know about bundling home and auto insurance, “some carriers give additional discounts for having a valuable articles policy and an umbrella (excess liability) policy,” explains Trent. Ask your agent about all available bundling options to maximize your savings.
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Contact an Independent Agent: Instead of calling insurance companies yourself, let an independent agent do the work. Trent says, “[These] agents represent your interests in the insurance market, and some carriers only offer rates through independent agents [anyway].” They can access exclusive markets, compare dozens of policies at once, and find discounts you might miss.
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Improve Your Credit Rating : “Many carriers closely tie their rates to a person’s IBS (Insurance Bureau Score) or financial credit rating,” Trent says. Improving your credit can help lower your premium. Focus on paying bills on time, reducing credit card balances, and checking your credit report for errors to boost your score.
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Be Mindful of Liability Risks: Swimming pools, trampolines, and playground equipment are fun for families but increase insurance premiums due to their accident risk. Insurance companies consider these “attractive nuisances” because they may draw people to your home and lead to injury claims. Consider this added cost when deciding whether to install such features on your property.
The Bottom Line
Beyond these tips, one of the most effective strategies is simply shopping around. Insurance companies offer varying rates and discounts for the same coverage. Getting insurance quotes from at least three carriers could save you hundreds on your premium while maintaining ample protection. Also, make a habit of reviewing your insurance plan every year. Thurman advises, “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.” Let your agent know about any home improvements or lifestyle changes that could qualify you for new savings.
