Wondering how to save on homeowners insurance? Between inflation, severe weather, rising rebuilding costs, and an increase in claims, you may have seen your premiums jump in recent years.
But the good news is that there are ways to lower your homeowners insurance without automatically cutting important coverage. From shopping around to raising your deductible to improving your home’s risk profile, here are some of the best ways to potentially save money.
Understand what drives your premium first
Before you learn how to save money on homeowners insurance, it helps to understand what insurance companies are actually looking at when they calculate your rate.
Some of the biggest factors that go into how much you pay for home insurance include:
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Your home’s age and condition
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Your location and local weather risks
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Your claims history
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Your credit (in most states)
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Your deductible
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How much coverage you carry
For example, if you live in a newly constructed home made out of the latest safety-grade materials, you may have lower insurance premiums than someone whose home was built decades ago, before building codes changed.
In many states, your credit score can affect your premium. In fact, two people could live in nearly identical homes in the same neighborhood and still pay different rates, largely based on factors like their credit profile or insurance history.
Shop around and compare quotes
One of the best ways to lower your homeowners insurance premium is also one of the simplest: Compare quotes from multiple companies.
Because insurers calculate risk differently, rates can vary widely between companies for very similar coverage. For instance, one insurer may heavily weigh your roof age, and another may care more about your claims history or location.
As you shop for home insurance, be sure to review:
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Deductibles
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Coverage limits
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Exclusions
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Replacement cost vs. actual cash value coverage
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Customer service and claims reputation
If getting multiple quotes sounds exhausting, you could also work with an independent insurance agent to cut through some of the decision fatigue. They can often shop several insurers for you at once, so you don’t have to fill out the same information over and over again.
Bundle your home and auto insurance
Another way to potentially save money is to bundle your home and auto insurance with the same company. This comes with two potential benefits:
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Many insurance companies will give you a discount for having two or more policies with them.
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Having multiple policies with the same company can make managing everything easier because you’re not having to jump between multiple apps or account logins.
Many insurers offer multipolicy discounts, and in some cases, the savings can be pretty substantial. Depending on the insurer, bundling could save you anywhere from 10% to 25% or more across your policies.
That said, bundling isn’t always the cheapest option, which is why it still pays to shop around.
Raise your deductible
Your home insurance deductible is the amount you agree to pay when you file a claim, before your insurance company will cover the rest.
In general:
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A higher deductible means you agree to pay more up front when you file a claim, which will lower your monthly premium
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A lower deductible means you agree to pay less when you file a claim, which will raise your monthly premium
For example, you could see your home insurance premium drop quite a bit if you raise your deductible from $500 to $2,500, but the trade-off is that if you file a claim, you’ll be responsible for more of the up-front cost yourself. Weigh this trade-off carefully and aim for a deductible amount you could comfortably keep in your savings account just in case you need to file a claim.
Improve your credit score
According to a report by the Consumer Federation of America, a typical homeowner with a low credit score pays nearly $2,000 more per year (almost double) for homeowners insurance compared to a neighbor with a high credit score. Since many insurance companies make decisions about your policy with your credit score in mind, improving your score can help lower your premiums.
Focusing on the following habits could boost your credit-based insurance score and help you save money on home insurance:
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Pay your bills on time. Payment history is one of the biggest factors in most credit scoring models.
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Keep credit card balances relatively low. Using too much of your available credit can hurt your score. A common rule of thumb is to keep balances below about 30% of your total credit limit.
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Set up autopay if you tend to forget due dates. Even one missed payment can potentially hurt your credit.
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Check your credit reports for errors. Mistakes happen, and disputing incorrect information could help improve your score.
Ask about home insurance discounts you may not know about
Some home insurance discounts are obvious, but others could be easily missed unless you specifically ask about them.
Depending on the insurer, you may be able to save money by doing the following:
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Going claim-free for several years
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Setting up automatic payments
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Choosing paperless billing
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Installing certain safety sensors
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Buying a newly built home
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Being retired or working from home more often
For example, your home insurance company could lower your premium if you install water leak detection devices because catching a leak early can prevent a much larger (and more expensive) insurance claim later.
Insurance companies don’t always automatically apply every discount you may qualify for, so this is one area where it genuinely pays to ask questions. And although individual discounts may seem small on their own, they can sometimes stack together in meaningful ways.
Make home improvements that reduce your risk
Certain home improvements could lower your home insurance costs because they reduce the likelihood of future claims.
One of the biggest examples is your roof. Some estimates find that a new roof can lower your home insurance costs by 5% to 35% alone.
You could also try any of these home upgrades:
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Updating old electrical systems
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Replacing outdated plumbing
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Installing storm shutters
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Adding a monitored security system
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Installing smart water leak sensors
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Upgrading heating systems
That said, not every renovation lowers your premium. For example, adding a swimming pool, trampoline, or home addition could increase your insurance costs because of the potential risk or increase in rebuilding costs.
Before starting a major project, check with your insurance company to see how certain upgrades could affect your premium.
Review and adjust your coverage
Many experts recommend reviewing your home insurance policy at least once a year, or whenever you’ve made home upgrades, have more or fewer belongings than you used to, or your finances have changed.
As you review coverage, pay attention to:
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Your dwelling coverage amount
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Coverage for jewelry, collectibles, or expensive electronics
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Your deductible
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Optional endorsements or add-ons
For example, if you previously scheduled expensive jewelry that you no longer own, you could remove that extra coverage to potentially lower your premium. Likewise, if construction costs have increased in your area, you may need to raise dwelling coverage so you’re not underinsured.
As you review coverage, be mindful of what you cut. You don’t want to drop items you need just to save money.
Avoid filing smaller claims (if possible)
It can be tempting to file a home insurance claim anytime something goes wrong. But for smaller issues, paying out of pocket may make more financial sense in the long run, since claims can affect your insurance history and potentially lead to higher premiums later.
For example, filing a small $2,000 hail damage claim may not feel worth it if your deductible is already $1,000 and your premium increases for the next several years afterward.
Claims can stay on your insurance record for years through databases like CLUE (Comprehensive Loss Underwriting Exchange), which insurance companies may review to price future policies.
Before filing a smaller claim, ask yourself these questions to determine if it’s worth it:
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How much would insurance actually pay after my deductible?
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Could this claim increase my premium later?
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Would I be financially better off paying for this myself?
Consider your location and risk factors
Even if you’ve never filed a home insurance claim yourself, you may still see premiums rise if your insurance company is paying out more claims across its service area overall.
While this tip for lowering homeowners insurance is a bit out of your control, there are sometimes ways to reduce certain risks tied to your property.
Here are some examples:
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Trimming trees near your home may reduce storm damage risk.
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Installing wildfire-resistant landscaping could help in fire-prone areas.
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Adding storm shutters may help in hurricane-prone regions.
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Upgrading drainage systems could help reduce water damage risk.
And if you’re shopping for a new home, insurance costs are absolutely worth factoring into the overall affordability picture. For example, you wouldn’t want to purchase an affordable house only to find out it has surprisingly high insurance premiums because of its location or claims history.
How to lower your homeowners insurance premium FAQs
How much can I save by lowering my homeowners insurance?
How much you can save truly depends on which strategies you use and what’s driving your costs in the first place. The best strategy is to shop around for an affordable home insurance company and pursue every possible discount you qualify for to lower rates even more.
Does raising my deductible really lower my premium?
In many cases, yes. When you raise your deductible, you are telling the insurance company that you are OK with footing a larger percentage of the bill if you file a claim. As a result, home insurance companies will often lower your premium because they’re taking on less of the financial responsibility if there’s an incident.
How does my credit score affect my homeowners insurance?
In many states, insurance companies can use your credit-based insurance score to calculate your rate. It’s not exactly like your traditional credit score, but it still considers factors like payment history, debt levels, and credit usage. Although it’s worth noting that some states restrict or prohibit insurers from using credit when setting rates.
What is the best way to lower homeowners insurance?
There usually isn’t one single best strategy because premiums are based on several factors. That said, shopping around is often one of the quickest places to start. Since home insurance companies weigh risk differently, one company may price your home much differently than another. You could also combine multiple approaches, like bundling policies, raising deductibles, asking about discounts, and making home upgrades.
Can I negotiate my homeowners insurance rate?
Not in the same way you’d negotiate the price of a car. Insurance companies use formulas to calculate rates, so there usually isn’t much room for direct bargaining. But you can still save money and lower home insurance costs by asking about discounts, reviewing your coverage, adjusting your deductible, or comparing competing quotes. Sometimes simply calling and asking your insurer to review your policy can uncover savings you didn’t realize were available.
