Homeownership is already full of added costs, and home insurance is becoming more expensive for some property owners due to an increase in damage from catastrophic events like wildfires and floods. State Farm recently stopped offering new policies in California, and Florida residents may see rates rise up to 40% after several insurers left the state last year. Insurance bills are expected to increase an average of 7% this year.
If you’re in the market for homeowner’s insurance for the first time or are looking to switch policy providers, comparing multiple quotes can help you find the cheapest rate (just make sure you’re getting the coverage you need). Aside from shopping around, there are a few other ways to lower your home insurance costs.
Increase your deductible
One of the simplest ways to save money on your policy is to increase your deductible (the amount you have to pay before your coverage kicks in). Home insurance deductibles most commonly range from $500 to $2,000, and increasing yours from $500 to $1,000 could save you up to 25% on your premium.
Bundle your home and auto policies
Insurance companies want more of your business, and having all of your policies under one roof can save you some money on your premiums. According to Insurance.com, bundling your home and auto policies will net you a discount averaging 18%—but it can be significantly more depending on the company.
File your claims strategically
Many insurance companies incentivize you not to use your home insurance policy by offering claims-free discounts. If you don’t file a claim for a set number of years (three to 10, usually), you may qualify for these savings.
Plus, as we’ve covered, it doesn’t always make financial sense to file a claim. If the cost of the repair is less than or barely higher than your deductible, or you’ve already made several claims, you may be penalized with higher premiums that’ll cost you more than the payout. Also, note that home insurance policies have a long list of specific exclusions and won’t cover wear, tear, and neglect.
Report home improvements and security upgrades
Home insurers like it when you make your property safer and will often reward you with policy savings, so let them know when you’ve invested in upgrades that protect against weather damage, theft, or accidents. Report these features:
Water leak and fire prevention systemsSecurity systemsDeadbolt locksUpgraded electrical, plumbing, and heating systemsStorm shuttersHeat-resistant roofingRequest a discount
Your insurer may have discounts that aren’t explicitly advertised, so it doesn’t hurt to ask if you qualify for any savings. Some insurance companies offer discounts for seniors, married couples, and loyal customers, for example. NerdWallet lists a handful of lesser-known discounts:
You live in a smoke-free homeYou’re a new homeownerYou opt into paperless billing or paying premiums via EFTYou work in a specific career (teachers, first responders, and military members, for example, may be eligible)Get rid of ‘attractive nuisances’
Swimming pools, trampolines, and playgrounds are fun backyard features, but they also increase liability and your home insurance costs. Other “attractive nuisances” include treehouses, old appliances, water features, and unfinished construction projects, all of which may pose a particular risk to children and teens. Consider getting rid of these if they’re not in use—or at least take every precaution to secure your property.
