Homeowners insurance rates can vary by hundreds of dollars depending on a few variables, including your insurance company, deductible, credit score, discounts, and other factors.
When shopping for homeowners insurance, it pays to look at multiple factors before buying.
Here is some information on how to get the best deal on homeowners insurance or other insurance rates.
10 Ways to Save Money on Homeowner’s Insurance Rates
Below is a quick list of 10 ways you can save on your homeowner’s insurance.
1. Shop Around for Better Insurance Rates
The easiest way to save money on your insurance rates is to shop around for a company that will give you a better deal.
Just be sure that you are comparing the same level of coverage when you compare insurance prices and that you are dealing with a reputable company.
A good place to investigate insurance companies is with your state insurance regulator’s office or the National Association of Insurance Commissioners (NAIC).
Get multiple quotes at the same time. There are several online companies that will search multiple insurance companies for the best rates, similar to Priceline or Travelocity for travel.
When you request a quote through these companies they will give your homeowner’s insurance rate quotes from several real estate agents and companies – including most of the major companies you are already familiar with.
2. Increase Your Deductible
Deductibles are the amount of money you are required to pay toward your claim before your insurance chips in.
A higher deductible will lower your monthly insurance payments. Just make sure you have enough money in your emergency fund to cover your deductible!
3. Combine Your Homeowners and Auto Insurance Policies
Many companies will give you discounts for having multiple accounts with them. You may be able to save anywhere from 5-15% with a multiple policy discount.
4. Loyalty Discounts
Many companies offer loyalty discounts for insuring your home with them for a prolonged period of time. Be sure to ask your insurance company if they offer these discounts.
5. Maintain a Good Credit Record and Credit Score
Your credit score can have a direct effect on your insurance costs. Improving your credit score can lower your insurance costs.
6. Enhance Your Home Security
Most companies will give you a discount on your annual homeowner’s insurance bill with proof of a home security system or enhanced security features.
Additional items home insurers look for include smoke detectors, fire alarms, burglar alarms, deadbolt locks, and sprinkler systems.
7. Make Your House Disaster-Resistant
No home is 100% disaster-proof.
But if you can prove to your homeowner’s insurance company that your home is less likely to suffer catastrophic losses in the event of an emergency, you may receive discounts on your homeowner’s insurance premiums.
Some examples may include storm shutters, stronger roofing, sprinkler systems indoors and outdoors, structural enhancements in earthquake zones and more. Be sure to discuss this with your insurance company for more details.
8. Review Your Insurance Policy Annually
Be sure to reassess your needs and the limitations of your homeowner’s policy on a yearly basis. you may find out that you are paying for more coverage than in necessary, or vice versa.
You want to ensure you have adequate insurance, but that you aren’t paying for more than you need.
Don’t forget to review the riders you may have for special items such as jewelry, artwork, electronics, or other high dollar items.
Also, be aware that many homeowner’s insurance policies do not cover flood insurance.
9. Insure for the Amount to Rebuild Your House, Not What You Paid for Your House
The odds are high that a substantial portion of your home’s purchase price included the land beneath the house.
If your house is destroyed, it will cost less to rebuild the house than it would to purchase the house because you are not paying for the land.
Don’t confuse the price you paid for your house with the cost of rebuilding your house.
The land under your house usually isn’t at risk from some of the major items covered by your homeowner’s insurance, including theft, fire, wind damage, and other damages.
10. Ask for Additional Discounts
Sometimes all you need to do to get a discount is ask. Also look for membership discounts for being a member of a group such as AARP, AAA, military or trade organizations, and other associations or groups.
Bonus tip: Pay your premium upfront. Many insurance companies will give a 5-10% discount for paying your annual bill upfront instead of in monthly installments. It never hurts to ask!
Ken says
Great stuff. My wife and I are building a house and will be looking at this issue very soon. WE just had a security system put in and I was hoping that would help offset or lower premiums.
Kristen says
Ryan, good tips, especially about insuring your house for what it would cost to rebuild. The same holds true for the contents of your house as far as replacement value. We have total replacement on our homeowners insurance. It’s a little more expensive, but if we ever need it, it will be totally worth it.
What good is it to buy a $1,000 television today and only get $600 if it’s stolen two years from now?
Ryan says
Michael,
Thanks for the information. I was not aware that was how they operated. I will look into that.
Michael @ The Life Insurance Insider says
All great tips.
Companies like Netquote that you list in #1 above don’t actually give rate quotes, they sell your name to other agents and companies that will contact you. That is not necessarily bad, but just be prepared to get a number of phone calls and emails and not a list of rates.
Steve says
Great list. I’d like to emphasize the shop around for better quotes tip, which is probably why you put it at number 1. This holds true for all types of insurance. Why do you think every insurance company claims you save money by switching? The provide lower rates to get new customers with the hopes of increasing as time goes by.
Spartan Saving says
If you live in an area with a high risk of damage from say hurricanes or earthquakes try to go private rather then governmental with your insurance. It’ll most likely be cheaper.
Hank says
I was disappointed by how little I personally saved on my homeowner’s insurance when I got a home security system. The alarm was pre-built into the new house. The monitoring fee is $35 a month, and I save only 10% off of my insurance premiums (about $45 a year). Not very cost effective
Ryan says
Perhaps not very cost effective when it comes to the insurance, but it may give you peace of mind and work as a theft deterrent. 🙂