Home insurance is a large expense for many homeowners, with the average annual premium at $1,315 nationwide according to 2022 data from the Insurance Information Institute. Thankfully, there are several strategies you can use to reduce your home insurance costs without cutting back on important protections.
1. Shop Around and Compare Quotes Thoroughly
- Get quotes from at least 3-5 different insurers for the most accurate rate assessment.
- Compare policies with identical coverage amounts to find the best deal. Don’t just focus on premium price – weigh factors like customer service ratings, complaints data, financial strength, discounts offered, and bundled savings.
- Work with an independent insurance agent who can provide quotes across multiple companies. Their expertise can help find hidden savings based on your unique risk profile.
- Look beyond big national insurers and check rates from regional and local companies as well.
- Be extremely detail oriented – one small difference in coverage, limits or deductibles can drastically impact pricing.
2. Optimize Your Deductible Amount
- The average deductible is $1,000 but lower amounts like $500 are common. Raise yours incrementally to determine the optimal balance of premium savings versus out-of-pocket risk.
- Also consider adding separate deductibles for hurricane, wind, or flood damage if those risks are pertinent to your area. This can lower base rates.
- Never set your deductible higher than you can afford to pay in the event of major damage. Being underinsured greatly increases financial risk.
3. Leverage Bundling Discounts
- Bundle your home and auto policies with one company to save up to 10-15% off your total premiums.
- If your current auto insurer doesn’t handle home policies, check for any multi-line discounts from your home insurance provider to bundle in the other direction.
- Also bundle other policies like boat, motorcycle, RV, flood insurance, etc. for additional compound savings if applicable.
4. Invest in Home Hardening Protective Measures
- Adding storm shutters, impact-resistant roofing, flood barriers, fire-retardant materials, lightning rods, and other protective measures can earn you discounts from insurers.
- Even if discounts don’t apply in your area, the long-term damage mitigation makes it a wise investment for your home’s durability.
5. Maintain Good Credit History
- Insurers use credit scores as a factor in setting premiums. Keep your score above 700 through responsible borrowing and on-time payments.
- Check credit reports from all three bureaus for any errors dragging down your score and dispute them. Improving credit health earns better insurance rates and loan terms.
- If your credit situation is less than ideal, consider taking defensive driving courses or bundling extra security features to help offset the score impact.
Following these tips can add up to significant savings over your current home insurance expenditure. Comparing all options thoroughly, optimizing deductibles and credit, bundling applicable policies, and proactively securing your home are wise money-saving moves to find the best coverage at the lowest viable premium.
