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7 Tips for How to Lower Home Insurance

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  • 7 Tips for How to Lower Home Insurance

As one of the most expensive investments most people make in their entire lives, you should want to protect your home from a major loss that could leave you with massive repairs.

If you have a mortgage, you don’t have a choice: you need homeowners insurance. But just because you have to pay for coverage doesn’t mean you should overpay.

Instead of setting your policy and forgetting about it until you need to make a claim, reviewing your plan could save you hundreds of dollars on your premium every year. Here are seven ways to save on home insurance.

1. Raise Your Deductible

Raising your deductible is one of the most commonly talked about ways to save on your policy with good reason. It’s a simple measure that has a direct effect on your premium.

A home insurance deductible is the amount you pay when filing a claim before your provider steps in to cover the rest of the bill in the event of a covered loss. If you can afford to pay out of pocket for a few thousand dollars worth of damage, then you may want to think about raising your deductible.

For instance, many providers offer deductibles starting at $1,000. If you know you’re comfortable with paying $1,000 to fix damages that your house could sustain, then you won’t need to file a claim for that damage. So, raising your deductible seems logical and could save you thousands long-term.

Oftentimes, when getting a homeowners insurance quote online, carriers let you choose your deductible. You can see how raising or lowering it affects your rate in real-time. You can also get in touch with your agent and ask if raising your deductible is the right move for you and your policy.

2. Look and Ask for Discounts 

This might sound obvious, but you won’t know about new discounts if you don’t ask. 

If you haven’t looked in a while, you’d be surprised to hear about the number of discounts that may be available. Student, military, and claims-free discounts are common. If you recently had a new roof installed, your insurer might reward you with lower home insurance premiums. 

Effectively mitigating your home against high winds could grab you big savings, too. Insurers in several states, like Florida and Texas, are required by law to discount premiums of homeowners who have demonstrated that their homes can withstand strong winds (usually from tornadoes or hurricanes).

Also, insurers like to see that you’re taking measures to protect your home from criminals. Adding a home security system, deadbolts, or even smoke alarms can qualify you for discounts.

Staying with one provider for a long time could qualify you for a loyalty discount. The extent and time required to be eligible vary by company; check in to see how close you are to hitting that milestone with your provider.

3. Reduce Your Risk

Insurance companies operate by calculating risk. If your home has aspects of risk, a carrier will likely make you pay more for coverage. In the eyes of an insurer, a lot of things constitute a risk. Some you can remedy.

Some features of your home or property that can raise your rate are commonly referred to as attractive nuisances. If you’re interested in saving on home insurance, you may want to get rid of a trampoline or playground equipment on your property. A pool, above ground or inground, is an attractive nuisance, too. You probably don’t want to get rid of your pool, but you should notify your insurer if you do for some reason.

More integral characteristics of your home can raise premiums, as well. A dated wiring system, like aluminum wiring or knob and tube wiring, can be very costly for your premiums and possibly scare some providers off altogether. 

Updating your home’s HVAC or wiring components, or eliminating some attractive nuisances can help you lower your premiums.

4. Bundle Your Policies

Some insurance companies offer discounts for customers who enroll in multiple policies. If you’re already paying for car insurance or life insurance, you could save on home insurance by bundling two or more of your policies with the same insurance company. 

The reward for bundling varies by insurer, but you may be able to save up over 10% on your premiums by doing it.

5. Pay Your Bill in Full

If you don’t pay for homeowners insurance through escrow, you typically can choose how you want to pay your premiums: monthly, quarterly, or yearly. If you choose to pay your premiums in one lump sum, your insurer could offer you a discount.

Again, the amount of the discount varies by provider, but insurers like to see you pay in full because then they don’t need to worry about you shopping around and potentially switching carriers during your policy term. A paid-in-full discount could be up to 10% of your yearly rate.

6. Avoid Filing Unnecessary Claims

Even though the point of homeowners insurance is to rely on your provider when you need it, filing claims can increase your rate. If possible, avoid filing claims for amounts that are just above your deductible, or for damage you could afford.

Let’s say you have a $1,000 deductible. A tree falls on the shed in your backyard, causing $1,800 in damages. Even though your insurer could cover this, it might be more cost-effective to save up and eventually pay for a new shed and the tree removal yourself instead of filing a claim. If your carrier increases your rate after this claim, you could end up paying more than $1,800 in the long run to your insurance company in the form of higher premiums. It could ultimately cost more in ten years to file a claim than it would have to fix the issue yourself.

Also, filing several claims in just over a year or two could be problematic. Filing a claim makes you a higher risk to cover than someone who has never filed a claim. Filing multiple claims, especially in a short period, could indicate an issue either with your property or your habits as a policyholder that insurers may consider a red flag. Consider not filing claims for every bit of damage, and avoid asking your insurance to cover something that isn’t covered in your policy. 

Pre-existing issues in and around your home aren’t covered in your policy, so don’t look for your insurer to help with these. Filing claims could raise your rates and the rates of other policyholders in the company if you continually look for coverage for these types of fixes.

Not all claims are problematic, though. Some claims, such as a dog bite or a theft, have greater effects on premiums than others. Your insurer recognizes that the chances of your dog biting someone again are likely greater than a natural disaster causing immense damage to your house. 

You shouldn’t hesitate to file a claim if you need it. Your insurer should always be there to help you, but trying to limit the number of times you summon them can save you money on your premiums. 

7. Shopping Around  

To consistently find the best ways to save on home insurance, your best bet is to shop around. Doing your homework on what provider offers what coverage at what price is the most tried and true way to find the best rate. 

Thankfully, online quote tools make it easy to compare multiple rates from carriers in one place so you can find the coverage you need at a price you want.

With the advent of insurtech and an ever-changing insurance market, you may never know exactly when and how much you could be saving by switching to a new provider unless you’re checking fairly regularly. 

This is especially true if you have some sort of state-backed insurance. Government-sponsored policies are usually meant to be plans of last resort. The way insurers view your property or calculate risks overall may have changed since the time you got your state-backed coverage.

Some technological advances or new opportunities are always arising in the private market that could make it cheaper for you to make the switch to a private insurer now.

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The editorial content on Clovered’s website is meant to be informational material and should not be considered legal advice.