How To Lower Home Insurance: Step-By-Step Guide

Alexandria Green
June 26, 2023
How To Lower Home Insurance: Step-By-Step Guide
How To Lower Home Insurance: Step-By-Step Guide

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Are you the one who wants to know how to lower home insurance?

Are you one of those who have been trying to save money and eyeing your insurance?

If so, you’re not alone. Insurance can seem like a massive drag on your bank account with no return.

You know that home insurance is worth it, and if you’re paying on a mortgage, it may be required.

You know that you’ll be happy to have it if something terrible ever happens to your home, but that can seem like a big “if.”

You (and your bank account) groan every time that big ol’ insurance payment comes out.

What’s a homeowner to do? Don’t worry, it’s possible to save money on homeowner’s insurance.

With just a little time and effort, you can lower your home insurance payments while staying safe.

8 Ways To Save On Home Insurance

(1) Raise Your Deductible To Lower Monthly Payments

This is probably what you thought of first, and it does work. If you raise your deductible, you’ll have lower monthly payments.

What’s a deductible? Good question. If you ever have to make a claim on your insurance, a deductible is an amount you have to pay before insurance kicks in.

Here’s an example. Let’s say your home floods, and the damages are worth $3,000.

If you have a $1,000 deductible, you’ll have to pay for $1,000 worth of repairs and your insurance will cover the rest.

So raising your deductible to $2,000 is a double-edged sword.

On the one hand, your monthly payments will go down. On the other, in the case of an accident, you’ll be paying more out of pocket.

If you want to lower your monthly payments by raising your deductible, make sure you have some savings built up first. That way you’ll still have a backup in the case of an accident.

(2) Check For All Possible Discounts

Did you know that you might be eligible for a discount on your insurance? It’s true! Most home insurance companies offer discounts for a variety of things. These typically fall into three categories:-

  • Home safety
  • Customer loyalty
  • Lifestyle

We’ll break these down more so you can know for sure if you’re eligible for a discount or not.

(i) Home Safety Discounts

Insurance companies obviously want you to make as few claims as possible.

This means they’ll give discounts on things that will help you keep your home safe or things that can help lessen the damage in case of an accident.

Here’s a list of repairs or equipment that can give you a discount:

  • New roofing
  • Storm safe windows
  • Steel doors and door-frames
  • Fire-resistant building materials in a renovation
  • Safety discounts for anti-theft alarms
  • Sprinkler systems and fire alarms
  • Recently replaced plumbing or electrical systems
  • Automatic water shutoff systems
  • How far away the nearest fire station is

This isn’t a complete list, and not every insurance company will offer discounts for everything on the list, so call them to double-check.

(ii) Customer Loyalty Discounts

Insurance companies also want to keep you as a customer for as long as possible.

This means that most insurance companies will have incentives for being a customer with them at all.

Some of the customer loyalty discounts you can look out for are:

  • Automatic payments
  • Paperless billing
  • Longer contracts
  • Bundling discounts for buying home and auto insurance with the same company

Again, every insurance company is different! Many of them offer other options, so don’t be afraid to ask.

(iii) Lifestyle Discounts

Lifestyle discounts cover a variety of things. Here’s a quick list:

  • Senior customers
  • Appreciation discounts for specific career paths, such as military, fire, police, teachers, healthcare workers, etc
  • Homes that don’t have a smoker living there
  • Being “claims-free” (never making a past claim on insurance)

(3) Shop Around, And Say So

Once you’ve double-checked the discounts you’re eligible for, it’s time to shop around. Using a tool like Insurify can help you with checking prices.

Insurify gives you a side-by-side comparison of insurance rates without needing to call every insurance company yourself.

Insurify doesn’t give out your information, so there’s no spam, and it’s free to use.

You input some information about yourself and your home, and Insurify connects you with the best rates possible.

When you do make calls to the companies you’re particularly interested in, let them know you’re looking for lower rates.

Some companies may offer an additional discount or a lower-priced plan. Make sure that you call your current provider, too.

If you let them know you’re thinking of switching, they may also offer a retention discount.

(4) Higher Credit Score, Lower Prices

Finally, don’t forget your credit score. Around 85% of insurance companies base their rates at least partly on your credit score, so keep that in mind when looking.

If you have a low credit score, your home insurance prices are going to be on the higher side.

If you need to work on your credit, try using a starter credit card like Chime.

Chime is a $0 annual fee credit card that doesn’t require a down payment. It’s designed to help you with building your credit in a low-risk way.

This tip isn’t quite as helpful if you need to lower your home insurance bill immediately. It’s important to remember that your credit score will impact more than just your insurance, though.

Even if building your credit score doesn’t put instant money in your pocket, it’s worth the time and effort.

Select My Policy- Home Insurance

(5) Bundle Policies

Why pay more when you can pay less? By bundling multiple policies, such as your home and auto insurance, with one insurer, you can unlock significant discounts.

Consolidating your policies not only simplifies your insurance management but also leads to substantial savings.

Picture the peace of mind you’ll have, knowing your home and vehicles are protected by one reliable insurer, all while enjoying the benefits of lower premiums.

(6) Consider A Less Risky Location

Location matters, not just for real estate, but also for your insurance premiums. If you have the flexibility to choose where you live, consider opting for a less risky area.

Lower crime rates and a decreased risk of natural disasters can result in substantial savings on your insurance.

Imagine the financial relief you’ll experience when you discover that your chosen location not only offers a safer living environment but also translates into lower insurance costs.

(7) Review Your Policy Annually

Life is constantly changing, and so are your insurance needs. Take the time each year to review your policy and make necessary adjustments.

Whether you’ve recently renovated your home, acquired new possessions, or experienced significant life events, reassessing your coverage can unveil opportunities for cost savings.

Stay proactive and ensure your policy accurately reflects your current circumstances.

By doing so, you’ll have the peace of mind of knowing that you’re not overpaying for coverage you don’t need.

(8) Avoid Filing Small Claims

While insurance is designed to protect you when unexpected events occur, it’s important to exercise caution when it comes to filing claims.

Consider handling minor repairs or losses out of pocket to avoid making frequent claims. By doing so, you can prevent your premiums from skyrocketing or, worse, facing policy cancellation.

Save your insurance for significant incidents, ensuring that you have the necessary coverage when it matters most.

Conclusion

Usually, we view those larger expenses as burdens, but home insurance doesn’t have to be.

Home insurance can help you and your family in case something happens to your home, so it should be something you’re relieved to have.

Cutting costs on your home insurance can help you benefit from safety without worrying about the price tag.

With a little time and a couple of phone calls, you can do just that. These tips should get you started with saving money and protecting yourself.

When you can have the best of both worlds, you can sleep soundly. You’ve taken care of your financial present and you have some help for the future. Way to go!

FAQs

The 80% rule in home insurance is a guideline that states that homeowners should insure their property for at least 80% of its replacement cost value. This rule helps ensure that homeowners have adequate coverage in case of a total loss.

In some cases, you may be able to negotiate home insurance rates. It’s worth contacting your insurance provider or shopping around to compare quotes from different insurers. You can also consider bundling your home insurance with other policies, such as auto insurance, as this may lead to discounts.

The choice of deductible depends on your individual circumstances and risk tolerance. A $2500 deductible means that you would have to pay $2500 out of pocket before your insurance coverage kicks in to cover a claim. A higher deductible often leads to lower insurance premiums, but it also means you’ll bear a greater portion of the cost in case of a claim.

Here are a few strategies to help cut down on insurance costs:-

  1. Shop around
  2. Increase deductibles
  3. Bundle policies
  4. Improve home security
  5. Maintain a good credit score
  6. Review coverage limits
  7. Ask about discounts

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