How to Save on Home Insurance

Home insurance can be pricey, but there are ways to save, including bundling and upgrading.

Written by Linda Childers / August 2, 2022

Quick Bites

  • Home insurance offers protection and peace of mind in the event your home or personal property is burglarized or destroyed in a fire or natural disaster.
  • Although premiums have skyrocketed in recent years, there are ways to save on home insurance without skimping on your coverage.
  • By installing security systems and making specific upgrades to your home, you can reduce your premiums, while also protecting your home from theft and natural disasters.

Being a homeowner has become a lot more expensive in recent years. Home prices rose nearly 19% from quarter one of 2021 to the first quarter of 2022, according to The Federal Housing Finance Agency (FHFA) House Price Index.[2]

In addition to home prices soaring, homeowners have also seen their insurance premiums rise. The Insurance Information Institute says material costs, labor shortages, supply-chain disruptions, and natural disasters, are driving insurance premiums up to an average of almost $1,400 a year.[1]

“We always remind consumers that no matter what insurance company they use, it’s important to have an annual insurance checkup,” says Gina Wilken, a public affairs specialist with State Farm. “This allows your insurance agent to take into account any upgrades made to your home and adjust your coverage as needed.”

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Janet Ruiz of the Insurance Information Institute also recommends shopping around and comparing prices on home insurance policies.[1]

“There’s a lot of great websites where you can input some basic information and compare home insurance rates with a number of different carriers,” she says. Two to consider are Zebra.com and Quotewizard.com.

While having home insurance isn’t negotiable since mortgage lenders require consumers to have a policy, there are ways to save on your premiums without sacrificing coverage. Read on to learn some cost-saving strategies.

Inside this article

  1. Bundle policies for savings
  2. Consider home safety upgrades
  3. Home improvement discounts
  4. Switch to a higher deductible
  5. Credit scores also count
  6. Seek out little known discounts

Bundle policies for additional savings

Purchasing multiple insurance products from the same company, a practice known as bundling, can help you to save money on overall insurance costs.

“When you purchase multiple insurance products, such as home and auto insurance from the same company, you can receive premium discounts and savings,” Wilken says.

Wilken recommends asking your insurer about a bundled discount. While the savings varies according to each insurer, you can expect to save approximately 5% to 25% by purchasing two or more insurance policies from the same carrier.

Consider home safety upgrades

By being proactive and installing certain home safety features, you can protect both your family and belongings while also lowering your insurance premiums.

Wilken says homeowners often qualify for insurance discounts if they have installed fire, smoke, or burglar alarms or any other home monitoring system. In addition, installing carbon monoxide detectors, smart locks and sprinkler systems, can also keep your family safe and lower insurance costs.

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If you decide to install a security system, keep in mind that not all systems offer discounts. The experts at Safehome.org note that security systems need to have a professional monitoring capability to qualify for insurance discounts of 10% to 20%. Their site lists recommendations for different locks and security systems.

Lock in a home improvement discount

Many insurers will offer discounts to homeowners who make repairs or home improvements that serve to protect property. These include fencing an existing swimming pool, updating electrical wiring and replacing old plumbing pipes.

Installing a new roof or storm-resistant windows can reduce the cost of your insurance while also protecting your home in the event of a natural disaster. It also offers protection in the event you need to file a claim. Some insurers won’t pay water damage claims if your roof wasn’t properly maintained.

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In addition, Wilken says if consumers use certain impact resistant roofing products, like hail resistant shingles or class 4 shingles, this can also qualify them for a discount on their home insurance.

Discounts for replacing or repairing roofs vary from 5% to 20%. Since your specific discount depends on the state where you live and your insurer, it’s best to check with your insurance company before embarking on a home improvement project.

Switch to a higher deductible

Your deductible is the amount of money you’re required to pay when you make an insurance claim. Setting a higher deductible will offer you a lower premium on your home insurance.

While a higher deductible lowers your premium, Wilken notes it also increases the amount you’re responsible for paying when you make a claim. Most insurers will allow you to select a deductible between $500 to $2000. To select the deductible amount that’s right for you, consider what you can afford to pay in policy premiums versus the out-of-pocket amount you’ll be required to pay in the event after making a claim.

“If you’re comfortable with paying more out-of-pocket at the time of a covered loss, it’s possible to lower your monthly premium,” Wilken says.

Pay attention to your credit score

Having a low credit score can also impact the cost consumers pay for home insurance. Many insurers use a credit-based insurance score to determine how likely it is for consumers to file a claim. Ruiz says that California and Washington are among the states that restrict insurance companies from using credit scores in determining home insurance rates.

To improve your credit score, pay your bills on time and eliminate credit card debt or keep your balance low.

Those who maintain a good credit score (700 or above), are often eligible for discounts on their home insurance premiums.

Seek out little known discounts

Many insurers offer discounts on home insurance policies that aren’t widely advertised. When updating your policy or purchasing a new policy, ask your insurer if you’re eligible for any discounts that could help lower your cost.

Some discounts that could reduce your premiums as much as 25% include:

  • Smart home devices. Having a connected home can result in savings. Some insurers, including USAA, offer discounts for homeowners that utilize smart home technology, where appliances and devices can be controlled remotely using a smartphone or tablet. These devices can check for water leaks, alert you to temperature fluctuations that can prevent water damage or frozen pipes and offer early detection of electrical problems.

  • New home or new home buyer. If you’re a first-time homebuyer or you purchase a home built in the last 10 years, you may qualify for a savings on your insurance premium. Insurers believe that new homes featuring new heating and air conditioning systems are less likely to result in costly claims.

  • Gated communities and HOAs. If you live in a home that’s part of a gated community or you’re part of a homeowners association, you may qualify for a discount on your home insurance since insurers believe these communities offer an extra layer of safety.

  • Warehouse clubs. Costco offers their members discounted home insurance through CONNECT, powered by American Family Insurance. They claim members report an average $583.60 in savings in the first year after switching to CONNECT.

    BJ’s Wholesale Club offers a similar home insurance program through Liberty Mutual.

  • Member organizations. If you’re over the age of 50 and are a member of AARP, and you bundle your auto and home insurance, you can save up to 5% on auto insurance and 20% on home, condo, or renter insurance, by purchasing a plan through their partnership with The Hartford.

  • Loyal customers. If you’ve had the same insurer for six years or longer, Ruiz recommends checking to see if you’re eligible for a loyalty discount. Some insurers offer a 10% loyalty discount to customers.

  • No-claims. If you’ve gone 10 years without filing a home insurance claim, your insurer might reward you with a discount of up to 20% on your premiums.

    “Check your home insurance policy when it comes up for renewal each year to ensure you have the right amount of insurance in the event disaster strikes and you need to rebuild or replace your home,” Ruiz says.

Article Sources
  1. "Insurance Information Institute." III. https://www.iii.org/
  2. "U.S. House Price Index Report - 2022 Q1." Federal Housing Finance Agency. https://www.fhfa.gov/AboutUs/Reports/Pages/US-House-Price-Index-Report_2022-Q1.aspx

About the Author

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Linda Childers

Linda’s articles on healthcare costs and Medicare have appeared in Forbes and MedicareGuide. She has also written on healthcare topics for Arthritis Today, California Health Report, Allure, Health Monitor, US News and World Report, O, The Washington Post and many corporate blogs.

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