Homeowners insurance can be one of your largest annual expenses. Learn proven strategies to reduce your premiums without sacrificing the protection you need.
1. Increase Your Deductible
One of the fastest ways to lower your premium is to increase your deductible—the amount you pay out of pocket before insurance coverage kicks in.
Potential Savings: Increasing your deductible from $500 to $1,000 can save you up to 25% on your premium. Going from $1,000 to $2,500 can save an additional 10-15%.
Best For: Homeowners with emergency savings who can afford higher out-of-pocket costs in case of a claim.
2. Bundle Your Policies
Most insurance companies offer significant discounts when you purchase multiple policies from them. Combining your home and auto insurance with the same provider is the most common bundle.
Potential Savings: 15-25% discount on homeowners insurance, plus savings on your auto policy.
Additional Bundles: Some insurers also offer discounts for adding umbrella policies, life insurance, or boat insurance.
3. Improve Your Home’s Security
Installing security systems and protective devices can significantly reduce your insurance costs while making your home safer.
Security Upgrades That Save Money:
- Burglar alarm system: 5-20% discount
- Fire alarm or sprinkler system: 10-15% discount
- Deadbolt locks: 2-5% discount
- Smart home monitoring: 5-15% discount
- Water leak detection system: 5-10% discount
4. Maintain Excellent Credit
In most states, insurance companies use credit-based insurance scores to help determine your premium. A higher credit score typically results in lower insurance costs.
How Credit Affects Premiums: Homeowners with excellent credit can pay 20-50% less than those with poor credit for the same coverage.
Ways to Improve:
- Pay bills on time consistently
- Keep credit card balances low
- Don’t close old credit accounts
- Check your credit report for errors annually
5. Stay Claim-Free
Filing multiple claims can dramatically increase your premiums or even result in non-renewal. Consider paying for small repairs out of pocket.
The Rule of Thumb: Only file claims that significantly exceed your deductible. For damages costing $2,000 or less, paying out of pocket often makes financial sense.
Claims-Free Discounts: Many insurers offer discounts of 5-20% for going 3-5 years without filing a claim.
6. Update Your Home Systems
Older homes with outdated systems pose higher risks and cost more to insure. Upgrading key systems can reduce your premiums.
High-Impact Updates:
- Roof replacement: New roofs can save 10-20%, especially with impact-resistant materials
- Electrical system upgrade: Replacing old wiring can save 10-15%
- Plumbing updates: Replacing old pipes can save 5-10%
- HVAC replacement: New heating/cooling systems can save 5-10%
7. Shop Around Annually
Insurance rates change frequently, and loyalty doesn’t always pay. Compare quotes from at least 3-5 companies every year or two.
When to Shop:
- 30-60 days before your policy renewal
- After major life changes (marriage, home improvements)
- If you haven’t compared rates in 2+ years
- After your credit score improves significantly
8. Ask About Lesser-Known Discounts
Insurance companies offer many discounts that aren’t always advertised. Always ask what’s available.
Common Discounts to Request:
- Non-smoker discount: 5-15% for households without smokers
- Senior discount: 5-10% for retirees or those 55+
- New home discount: 5-15% for homes less than 10 years old
- Professional group discount: 5-10% for members of certain professional organizations
- Early signing discount: 5-10% for starting coverage before closing
- Paid-in-full discount: 5-10% for paying annually instead of monthly
- Paperless discount: 2-5% for going paperless and setting up auto-pay
9. Review Your Coverage Limits
Make sure you’re not over-insured. Your dwelling coverage should reflect the cost to rebuild—not your home’s market value or the amount of your mortgage.
What to Review:
- Remove coverage for renovations you removed (e.g., pool that was filled in)
- Reduce personal property coverage if you’ve downsized belongings
- Adjust for local construction costs, which may have decreased
10. Consider a Group Policy
Some employers, alumni associations, and professional organizations offer group homeowners insurance with discounted rates.
Where to Look:
- Employer benefits program
- College or university alumni associations
- Professional associations (bar association, medical association, etc.)
- Credit unions
- Military organizations (USAA for eligible members)
Bottom Line
By implementing several of these strategies, most homeowners can save 20-40% on their annual insurance premiums. Start with the easiest changes (shopping around, bundling policies, increasing your deductible) and work your way to larger improvements.
Remember, the goal isn’t just to save money—it’s to get the best value for your coverage. Always ensure you maintain adequate protection for your home and belongings while seeking savings.
Ready to compare rates? Use our insurance company reviews to find the best providers in your area, and check our state guides for specific savings tips in your location.