How to Pay Less for Your Homeowners Insurance Premium

When you find the house of your dreams, you’ll want to protect it with homeowners insurance. It covers destruction to your home, burglaries, and personal liability for people harmed at your home. It’s essential for protecting your investment — and most lenders require it when you take out a mortgage.

So, how can you get the best deal on homeowners insurance? We’ve got 12 tips to help you lower your homeowners insurance premium!

1. Shop Around and Talk to an Independent Insurance Agent

If you want the best deal, it’s smart to shop around. You can do this yourself online, but an independent agent can also be a great advocate for you. Independent agents are familiar with many insurance companies — what they offer and for how much. They can point you to options you may not have thought of and build an insurance package that covers all your bases. Plus, they’re paid by the insurance company, so it’s free to work with them!

2. Raise Your Deductible

When you make a claim with your insurance, you pay a deductible. This is a set amount of money you pay toward the loss before the insurance company covers the rest. For example, let’s say it costs $7,000 to replace your roof after a hailstorm, and your deductible is $1,000. You would pay $1,000 to repair your roof, and your insurance company would pay the other $6,000.

If you’re willing to pay a higher deductible, you can pay a lower monthly premium. But be careful. Make sure you have savings to cover the higher deductible should you need to pay it.

3. Bundle Your Home and Auto Insurance

Most of us need both homeowners insurance and auto insurance. Insurance companies want to get as much of that business as they can, so they reward loyalty. If you buy your home and auto insurance from the same company, you could save up to 20 percent on your premiums!

4. Resist Filing Every Possible Claim (If You Can)

Just like auto insurance, companies will penalize customers who make a lot of claims. They may raise your rates or even cancel your policy. So, if you’re looking at a smaller claim, consider the long-term costs before filing. If the raised premiums will ultimately cost more than the repairs, see if you can fund the repairs on your own. 

5. Make Your Home Safer

Insurance companies love to see that you’re taking measures to protect your home. It lowers their risk and allows them to lower your premiums. Ask your insurance company about improvements that can help lower your rates. Possibilities include: installing storm shutters, reinforcing your roof, and retrofitting older homes, as well as updating plumbing, heating, and electrical systems.

These updates may be costly, but smaller updates can make a difference, too. Installing smoke detectors, deadbolt locks, or burglar alarms can help you save 5 percent!

6. Ask About Special Discounts

Your insurance company may have discounts that are unique to them. Some will give a discount to retirees. You may get a discount if you sign-up for paperless billing or if you work in certain fields. They may discount your premium if you’re a new homeowner. Tell your agent you’re interested in learning about all relevant discounts.

7. Build a Strong Credit Score

If you’re a new homeowner, you’ve likely already learned the value of a strong credit score. Like lenders, insurance companies see your credit score as a sign of your reliability and will reward a higher credit score. Once you have your house, make sure to keep paying bills on time, pay off credit card debts, and review your credit report to spot any errors.

8 .Eliminate Safety Hazards

Trampolines and swimming pools are fun, but they can also be dangerous temptations to neighborhood kids. Because of this, these items often come with an increased insurance premium. You will also need to make them inaccessible to curious, unsupervised children. This is usually done by erecting a fence. If you don’t anticipate using these items very often, your best option may be to remove them entirely. Your insurance rate will decrease, and you’ll get to sleep soundly at night.

9. Stick with the Same Insurance Company

Insurance companies know you have a lot of options, so many offer loyalty discounts. When you pick an insurance company, ask about these rewards. How many years in do you start getting loyalty discounts? How much do they offer? If you’re considering another carrier, this information can help you know if the move will be worthwhile or if it’s better to hold out for the discount.

10. Pay in Full Upfront

Homeowners insurance terms generally run for 12 months. You may have heard people talk about their monthly premiums. In reality, though, you have one premium for the 12-month term. You then choose if you want to make monthly payments on that premium or pay it in full at the front of the billing cycle. Insurance companies generally offer a discount to customers who pay everything at once. 

11. Review Your Insurance Every Year

The value of your property and possessions can change from year to year. More expensive items may have decreased in value. Or if you’ve made certain home improvements (as discussed above), you may be eligible for a lower premium. Review your insurance package every year to make sure you’re getting the best price you can. It also doesn’t hurt to see what competitors have to offer.

Discover More Secrets to Responsible Homeownership

Homeownership will always have its surprises — but that doesn’t mean you have to be caught unprepared. Our Post Purchase Homeownership Course will teach you how to plan for expenses, expected maintenance, tax benefits, and more. Take it online, at your own pace, any time!