How To Get a Great Rate on Homeowners Insurance

With all the expenses associated with homeownership, many people forget that there are ways to save when insuring it. Here are 10 things you can do to help lower your insurance premiums.

1. Secure your home.

Installing a home security system is a good way to protect your property. But it can also reduce the cost of your homeowners insurance, since it reduces the chance of a burglary. Before you make a purchase, check with your insurer to learn about its alarm system requirements or recommendations.

2. Protect against disasters.

The Insurance Information Institute reports that in 2020 (the most recent data available), some of the top reasons homeowners filed insurance claims were:

• Wind and hail (45.5%)
• Water damage and freezing (19.9%)
• Fire and lightning (23.8%)
• Theft (0.6%)

Taking steps to make your home more resistant to severe weather can include things like upgrading your roof, trimming large trees and adding storm shutters. As with installing a security system, check with your insurer first to see if the home improvements you’re considering will qualify for insurance discounts.

3. Improve your credit score.

Insurance rates are determined by a variety of factors, including your credit history, so it’s important that your credit score be as high as possible. Three of the best ways to improve your credit score are:

• Pay all your bills on time.
• Reduce your debt-to-income ratio. One of the best ways to do this is to pay off credit card debt as soon as possible, then adjust your spending habits so you can pay off the balance in full each month.
• Check your credit report on a regular basis to make sure there are no errors. You’re entitled to a free copy of your report annually from each of the three credit reporting companies.

4. Avoid high-risk pets.

Depending on your insurance company, you may pay higher premiums if you own a pet that falls into the “exotic” or “aggressive breed” categories. Before getting a pet, talk with your agent to see if it may affect how much you pay for insurance.

5. Ask about discounts.

Ask your insurance company if you qualify for other discounts. You may be rewarded for having a claim-free history or being a loyal customer, or you could get a discount for being retired or a nonsmoker.

6. Bundle your policies.

Most insurance companies will offer discounts when you buy both a home and auto policy from them. Discounts are typically 5% to 15%, but do the math before you bundle to see whether the discounts outweigh any savings you might get by buying the policies from different companies.

7. Make a single premium payment.

Are you making monthly payments on your home insurance? If you are, you’re probably paying a fee to do so. You can avoid that fee by paying for your insurance in full at the start of the billing cycle. And you’ll also have one less bill to pay each month.

8. Raise your deductible.

Your deductible is a set amount that you must pay toward a claim on an insured loss.

If, for example, you have a $500 deductible and have $2,000 in damages to your home, you’ll be responsible for paying the first $500, and your insurance company will pay the $1,500 balance.

Raising your deductible—even going from $500 to $1,000—will lower your monthly premium. Just remember, with any loss, a higher deductible will mean you’ll pay more out of pocket to cover it.

9. Avoid overinsuring.

When buying a policy, or when your policy is up for renewal, review it to make sure you need the full amount of coverage you’re paying for.

You may have extra insurance to cover specific types of possessions, such as jewelry, business equipment or freestanding structures on your property.  If you no longer own the items or if they’re worth less than they were when you initially had them insured, canceling or reducing the coverage will lower what you pay for insurance. Get your insurance checked each year to make sure you’ve got the right amount of coverage.

10. Consider your claims.

If you file multiple claims, your insurance company could see you as a high-risk customer, leading to a rate increase or—even worse—having your policy canceled. When a loss is for less than your deductible, or the amount the claim would pay out is relatively small, you’ll do better to pay out of pocket rather than filing with your insurance company.