How to Lower Homeowners Insurance Costs

The good news? There are several ways you can lower your homeowners insurance costs without sacrificing coverage. Whether you’re a first-time buyer or have been paying for years, these tips will help you save some cash. Let’s dive in!

One of the easiest ways to lower your homeowners insurance costs is by shopping around. You might be surprised how much premiums can vary from company to company for the exact same home. Don’t settle for the first quote you get! Take the time to get at least three quotes from different insurers and compare them side by side.

It’s also worth asking friends and family for recommendations and checking online reviews. The cheapest option isn’t always the best one—sometimes, paying a little more for better customer service and claims processing is worth it. But with so many insurers out there, it’s smart to compare your options and see where you can save.

The Comprehensive Loss Underwriting Exchange (CLUE) report is like a credit report for your home. It details any claims made on the property over the last five years. This report is important because insurers often use it to determine how risky the property is to insure. Too many claims in the past can lead to higher premiums or even denial of coverage.

Before you buy a home, ask your real estate agent or insurance agent to help you obtain the CLUE report. It’s a good idea to make your offer contingent on a home inspection, too. That way, if any past issues come up in the report, you can ensure they’ve been fixed before committing to the purchase.

Once your offer on a home is accepted, it’s time to start looking for homeowners insurance. Don’t wait until the last minute! You’ll need to have insurance in place by the time you close, and if there are any issues with obtaining coverage, you don’t want to find out when you’re sitting at the closing table.

It’s always a good idea to get this done early so you have time to work through any hiccups, like an insurer denying coverage due to the home’s location or condition.

Did you know your credit score can affect your homeowners insurance premium? Many insurers use credit-based insurance scores to help determine how much you’ll pay. Essentially, the better your credit score, the lower your premium is likely to be.

If your credit score could use a boost, start working on it before you buy a home. Pay your bills on time, reduce your debt, and avoid opening too many new accounts at once. Over time, these steps can improve your credit and save you money on insurance premiums.

One easy way to lower your homeowners insurance cost is to bundle it with other policies, like your auto insurance. Many companies offer a discount when you purchase multiple types of coverage from them. However, always make sure the bundled price is actually lower than buying separate policies from different companies. Sometimes, the discount doesn’t add up to significant savings, so do the math before committing.

Your deductible is the amount you pay out of pocket before your insurance kicks in to cover a claim. If you can afford to increase your deductible, it can lower your monthly premium significantly. However, this strategy only works if you’re financially prepared to cover the higher deductible in the event of a claim.

Also, avoid filing claims for small losses—especially those under $1,000. Too many claims can cause your premiums to rise, or worse, your insurer might drop you.

Are you a member of an alumni association or another organization? Many of these groups offer homeowners insurance discounts through partnerships with insurance companies. It’s worth checking with any associations you belong to, as these deals could lead to decent savings.

Most insurance companies offer a variety of discounts based on different factors. For example, if you’re retired or work from home, you may be eligible for a discount because you’re around more often, reducing the risk of theft.

Other discounts might include things like:

Ask your insurance agent to go over any potential discounts that could apply to your situation. You may already have certain features in place that qualify you for savings.

Your homeowners insurance needs can change over time, so it’s smart to review your policy once a year. Look at your coverage limits and consider the value of your home and possessions. Some items may have depreciated, meaning they don’t need as much coverage as they once did. This is especially true for things like electronics and furniture.

Adjusting your policy to reflect these changes could help lower your premiums.

In some high-risk areas, like those prone to flooding or wildfires, standard insurance companies may not offer affordable coverage, or they might not cover the home at all. If that’s the case, you may qualify for a government-backed insurance plan designed to make coverage more accessible.

These programs vary by location, so check with your insurance agent to see what options are available in your area.

One mistake many homeowners make is insuring their house for its market value rather than its replacement cost. The market value includes the land your house sits on, but that’s not what you’re insuring. You only need to cover the cost of rebuilding the home in the event of a disaster, which is often much less than the market value.

Make sure your policy reflects the correct amount of coverage to avoid paying higher premiums than necessary.

Lowering your homeowners insurance costs doesn’t have to be complicated. By taking simple steps like shopping around, raising your deductible, and bundling policies, you can save money while still protecting your home. Don’t forget to review your policy regularly, and always be on the lookout for new discounts and opportunities to lower your premium. With a little effort, you can keep more money in your pocket without sacrificing your peace of mind.