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Home Insurance Premiums Just Increased? How to Lower Your Costs Thumbnail

Home Insurance Premiums Just Increased? How to Lower Your Costs

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By Carolanne Chavanne, CFP®

If you’ve noticed a significant rise in their home insurance premiums, you’re not alone. However, there are several strategies you can employ to help lower your home insurance premiums without sacrificing coverage. Here’s how you can manage (and even reduce) your costs.

1. Shop Around for Better Rates

The first step to lowering your home insurance premium is to compare rates from different insurance providers. Insurance companies calculate premiums differently, so the cost of the same coverage can vary significantly.

Here are some tips when shopping around for better rates:

  • Get at least three quotes from different insurers.
  • Check for any available discounts, such as bundling home and auto insurance.
  • Review the coverage details to ensure you're comparing equivalent policies.
  • Use online comparison tools or work with an insurance broker for a better rate.

2. Increase Your Deductible

Raising your deductible can lower your premium. While this means you’ll have to pay more upfront if you file a claim, it can significantly reduce your annual costs. For example, increasing your deductible from $500 to $1,000 could save you up to 25% on your premium.1

3. Improve Home Security

Insurance companies often offer discounts for homes equipped with security systems. By making your home safer, you reduce the likelihood of a claim, which insurers reward with lower premiums. Consider installing security alarms, smoke detectors, deadbolts, and cameras. Some insurers offer discounts of up to 15–20% for comprehensive home security systems.2

4. Bundle Insurance Policies

Many insurance companies offer discounts if you bundle your home insurance with other types of coverage, like auto or life insurance. Bundling can simplify your billing and provide significant savings. Depending on the insurer, potential discounts can range from 5% to 25%.3

5. Review and Update Your Policy

Regularly reviewing your home insurance policy may help you save money. By periodically assessing the value of your belongings and adjusting your life stages (for example, if you pay off your mortgage), you may be able to adjust your policy and save yourself money. Here are some examples of updates that might change your home insurance premiums:

  • Ensure your coverage reflects the current value of your home and possessions.
  • Eliminate unnecessary add-ons that no longer apply to your situation.
  • Update your insurer about any home improvements that could qualify you for discounts.

6. Maintain a Good Credit Score

Your credit score can influence your home insurance premium. Insurers often use credit-based insurance scores to determine the likelihood of a claim. Maintaining a good credit score can help you secure lower premiums.

7. Consider Policy Discounts

Insurance companies offer discounts you might be eligible for but aren’t currently taking advantage of. For example, some insurers provide discounts for being claim-free, non-smokers, or even seniors.

8. Avoid Small Claims

Did you know that filing multiple small claims can lead to an increase in your premium? Insurance companies may raise your premium or even drop coverage if you file fewer claims. If you can, consider paying for minor repairs out of pocket. This helps keep your claims history clean, which can result in lower premiums over time.

While rising home insurance premiums can be a shock, there are ways you can lower your costs. You can effectively reduce your home insurance premium by shopping around, increasing your deductible, improving your home’s security, and taking advantage of available discounts.

  1. https://www.cnbc.com/select/homeowners-insurance-skyrocketing-how-to-lower-premium
  2. https://insurify.com/homeowners-insurance/knowledge/security-system-discount/
  3. https://www.capitalone.com/cars/learn/managing-your-money-wisely/the-benefits-of-bundling-insurance-policies/2890

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.