You can lower home insurance rates through home maintenance, higher deductibles, a higher credit score, and more.
Homeowners insurance is catching homebuyers' attention in a few high-risk areas, like Florida, but most homeowners still don't realize insurance could be quietly costing them more than it should. The good news? You could take advantage of various insurance discounts and incentives that can help you lower your insurance premium. Read on for ideas on how to lower home insurance.
Key Takeaways
- Many homeowners overpay for insurance because they don’t review their policies.
- You could qualify for discounts after installing security features or home improvements.
- Insurers also offer bundled insurance plans that can help you save more.
- Even improving your credit score could reduce insurance premiums.
- Create a multipronged approach with the 14 tips below to save more on insurance this year.
14 Ways to Lower Your Home Insurance Rates
If you're overpaying on home insurance rates, here are tried-and-true strategies to reduce your monthly premiums.
Increase Your Deductible
The deductible is the amount you'll have to pay in case of any insurance claims. Increasing your deductible is one of the fastest ways to lower your home insurance premium. For example, you could save an average of 13% a year on your insurance premium by increasing your deductible from $1,000 to $2,500.
Bundle Home and Auto Insurance Policies
Many insurers offer various types of coverage, including home and auto insurance policies. If you bundle policies, like the best homeowners insurance and car insurance, you could save on both policies.
According to the Insurance Information Institute, bundling auto and home insurance with the same company could save you an average of 5% to 15% on your homeowners insurance premium. You could also consider coinsurance for home and health.
Install Security Systems and Smoke Detectors
Improving home security can save you a bit on insurance. Consider adding a home security system, burglar alarm, or deadbolt locks. Keep your smoke detectors maintained, or add a monitored fire and burglar alarm. Of course, compare the costs of high-end security systems to long-term insurance savings.
Make Your Home More Disaster-Resistant
Hurricanes, tornadoes, fires, floods, and earthquakes are all threats to your home out of your control. However, you can make additions to the home to resist natural disasters. You could lower your insurance premiums by adding storm shutters, replacing or reinforcing your roof, and updating an older home to better withstand earthquakes.
Modernizing plumbing or electrical systems can reduce the risk of fire or water damage and, therefore, also mean a lower premium.
Ask About Discounts
Some insurance companies offer various discounts. Check for discounts for seniors, nonsmokers, or loyal customers. Seniors or retired individuals, for example, have more time to maintain their homes and may qualify for up to a 10% discount. If your employer offers a group insurance program, you may also be able to get better rates than a private plan.
Remove Unnecessary Coverage
If you have coverage for unnecessary risks, such as flood insurance when your home isn't in a flood zone, removing the coverage could reduce your home insurance costs. Review the coverage and your needs, then shop for the best insurance premiums available.
Consider Paying Annually Instead of Monthly
Many insurers offer a discount for annual payments. For example, instead of $150 a month, consider paying $1,500 annually to save $350 a year.
Maintain and Upgrade Your Home Regularly
Updates, especially to major home systems that can cause issues, like the HVAC, plumbing, or electrical systems, can reduce insurance premiums. Repair the roof, ensure windows and doors seal well, and that all locks work well to lower insurance premiums.
Don't File Small Claims
Every time you file a claim, your premium will usually go up as it changes your insurance file and the probability that you'll make a claim. If you have minor damage, consider paying out of pocket and not filing an insurance claim. In the long term, you could save significantly more than out-of-pocket costs.
Install Smart Home Devices
Smart home devices can mitigate some home risks. It can make your home less susceptible to theft, water damage, or fires. Many insurance companies offer discounts to customers who install smart home devices. You can check with your insurer for possible discounts.
Remove Attractive Nuisances
Consider whether you need fun but high-risk features that could increase your insurance premium. Pools, trampolines, and playground sets can all increase premiums, even if they're not getting any use.
Also, piles of debris, mulch, or other gardening or home supplies can increase insurance risks. You could be liable if children are tempted to play on them and get injured. Get rid of them as fast as possible to reduce insurance price increases.
Improve Your Credit Score
Surprisingly, many insurance providers use your credit score when calculating your insurance premiums. In most states, companies can use a credit-based insurance score. If your score is 630 or lower, you might pay higher rates, even if that's unrelated to your property.
According to some reports, someone with poor credit could pay up to 73% more for home insurance than someone with good credit.
If you have a low credit score, Benzinga offers tips to build your credit score, improve your credit score overnight, or even boost your credit score by 200 points before applying for a new insurance policy.
Review and Update Your Policy Annually
Your policy should cover any major purchases or additions to your home, so it's important to review it at least once a year.
Likewise, if certain high-value personal items have dropped their value, you could reduce the policy or coverage limits for contents insurance. Consider any additional coverage for high-value art, jewelry, electronics, or other valuables and adjust your policy accordingly. Here is an overview of the eight types of home insurance to ensure you have the coverage you need.
Shop Around and Compare Quotes From Multiple Insurers
Finally, remember to compare quotes. Prices from one insurer to the next can vary greatly. Some reports suggest you could save $1,000 or more a year by comparing rates. You could save more by comparing rates with Benzinga's top providers or using multiple comparison sites.
You can also ask an insurance agent or broker to compare rates and offer additional quotes.
Compare the Most Budget-Friendly Home Insurance Plans From Benzinga’s Top Providers
To get started, compare the best budget-friendly home insurance plans from Benzinga's providers.
Final Tips to Lower Your Insurance Premium
Lowering your home insurance premium could save you up to $1,000 or more annually. Keep your home in good repair, install security and fire systems, and take other reasonable steps to protect it from natural disasters or theft. Then, remember to shop around, compare rates, and review your coverage annually to save more.
Frequently Asked Questions
How much does the average homeowner pay for insurance annually?
The average cost of homeowners insurance varies by state and property type. In states with the lowest insurance rates, you could pay as little as $613 (Hawaii) to $1,384 (Delaware). In high-cost states like Oklahoma, you could pay up to $5,858.
How does location influence home insurance rates?
Location affects your home insurance costs in several ways. The risk of natural disasters or theft increases insurance premiums and individual state policies.
How do insurance costs differ for primary residences vs. vacation homes?
Vacation homes typically carry a higher insurance premium because the homeowners are not always at the property and, therefore, could miss issues that lead to damage, such as a leak. They are also at a higher risk of claims. Additionally, you’ll pay higher premiums if the vacation home is in a high-risk area.
About Alison Plaut
Alison Kimberly is a freelance content writer with a Sustainable MBA, uniquely qualified to help individuals and businesses achieve the triple bottom line of environmental, social, and financial profitability. She has been writing for various non-profit organizations for 15+ years. When not writing, you will find her promoting education and meditation in the developing world, or hiking and enjoying nature.