Home insurance rates have increased in many parts of the country due to rising construction costs, severe weather claims, and inflation. While higher premiums can be frustrating, there are several ways homeowners can reduce costs without leaving themselves underinsured.
1. Bundle Your Home and Auto Insurance
Bundling remains one of the most effective ways to reduce insurance costs.
Many carriers offer significant discounts when homeowners place both their home and auto policies with the same company. The discount could be as high as 20% on both policies!
While the cost of one of the policies may be higher than you can get through a different company, the overall cost may be less when the discount is added to the other policy.
2. Increase Your Deductible
Choosing a higher deductible can lower your annual premium.
For example:
- $1,000 deductible
- $2,500 deductible
- $5,000 deductible
Policies written many years ago may only have $250 or $500 deductibles. Some may be as low as $100! The higher the deductible, the lower your premium becomes. However, only increase your deductible to an amount you can comfortably afford out of pocket if a claim occurs.
3. Install Smart Home Protection Devices
Insurance companies love homes that are less likely to experience a loss.
Devices that may help reduce premiums include:
- Monitored burglar alarms
- Central fire alarms
- Water leak detection systems
- Automatic water shutoff devices (Some companies will provide the device at no cost to you. You would only need to pay the cost of installation.)
- Smart smoke detectors
These upgrades not only help prevent claims but can also qualify for discounts with many carriers. If you have one of these devices already, check to be sure you are getting the discount if available.
4. Maintain Good Credit
In many states, insurers use insurance-based credit scoring as part of their underwriting process.
Homeowners with stronger credit profiles often receive more favorable rates because statistical data shows a correlation between credit history and insurance loss frequency. Improving your credit score could help lower both home and auto insurance premiums over time.
5. Avoid Filing Small Claims
Every claim has the potential to affect future premiums.
For smaller losses, it may be worth comparing:
- Cost of repairs
- Policy deductible
- Potential premium impact
A long claim-free history can qualify you for valuable discounts and make your account more attractive to preferred insurance carriers. Consider paying smaller claims yourself.
6. Keep Your Home Well Maintained
Insurance companies reward homes that present fewer risks.
Pay close attention to:
- Roof condition
- Electrical systems (Consider updating older systems especially those that utilize fuses or outdate wiring.)
- Plumbing (Older plumbing systems are much more likely to have pipes that will leak or burst.)
- Heating systems
- Tree maintenance (Remove branches that overhang your home or present a risk of damaging other property.)
- Siding and exterior repairs
Many carriers become hesitant when roofs approach the end of their useful life. The average life of an asphalt shingle roof is 20-25 years. Roofs statistically have more losses once they are 15 years old or older. Your insurance company may apply a higher deductible or only pay for the depreciated value of the roof after a certain age. Replacing an aging roof will not only reduce the risk of a claim but may qualify you for a lower deductible, full replacement of the roof in the event of a loss, and a discount on your premium. It could also improve eligibility for better insurance markets.
7. Review Your Coverage Annually
A policy that was perfect five years ago may no longer fit your situation today.
Consider:
- Recent home improvements
- Finished basements
- New detached structures
- Valuable jewelry or collectibles
- Changes in liability exposure (Do you have a pool or trampoline?)
At the same time, verify you are not paying for unnecessary endorsements or coverage limits that no longer apply.
8. Periodically Shop Your Coverage
One of the biggest mistakes homeowners make is staying with the same insurance company year after year without checking the market.
Companies adjust their rates annually. Over time, the company that offered you the best premium several years ago may no longer be your best option.
Generally, the rate changes are not significant year over year. But, they can add up over time. It’s not necessary to shop your coverage every year. But, we recommend that you check every five years or so to see if your current policy offers you the best option.
This is also a good time to review your coverage to make sure it still meets your needs. New coverages and discounts may be available as well.
9. Work With an Independent Insurance Agent
The type of agent you work with can make a big difference in the options, coverages, and the service you recieve. Click here to read about the differences between Captive and Independent Agents and the advantages of each.
Independent Agents work with multiple companies and can shop your coverage periodically for you to be sure you’re getting the option that best meets your needs.
Final Thoughts
The goal should never be to buy the cheapest policy. The best value is a policy that provides strong protection at a competitive price.
Saving money on home insurance does not have to mean cutting coverage. The most effective strategies typically involve shopping the market, bundling policies, increasing deductibles where appropriate, maintaining your home, and taking advantage of available discounts.
A yearly insurance review can ensure you’re paying a fair premium while keeping the protection you need for one of your most valuable assets. By taking a proactive approach, many homeowners can reduce costs and improve coverage at the same time.
When was the last time you reviewed your homeowners insurance? A quick comparison of coverage and pricing could reveal opportunities to save while better protecting your home and family. Send us a copy of your current home insurance declarations pages (the pages that list your coverages, limits, and endorsements). Alternatively, go to our quote request page and complete a quick quote request form. We’ll do the heavy lifting and shop your insurance through our multiple, top-tier insurance company partners.