8 Ways to Lower Your Homeowners Insurance Premium

Adam Morgan
Adam Morgan
Contributor
6

The rate you pay for homeowners insurance depends on many factors that are out of your control, but there are a few things you can do to pay less: bundle your policy, install home security devices, increase your deductible, disaster-proof your home, adjust your coverage, shop around for quotes, or even be selective about dog breeds.

1. Bundle your insurance policies

Bundling insurance policies is when you purchase two or more policies from the same insurance carrier. For example, many consumers buy their home and auto insurance policies from the same provider. Insurance companies usually offer discounts to customers who bundle their policies, with discounts starting at just a few percent and going as high as 25%, depending on the insurance company. 

One important note: Even if bundling insurance policies will earn you a discount, that doesn’t mean it will necessarily save you money. Sure, you get a discount on the policies you buy from a specific company. But make sure you shop around for both policies because you might be able to save more by selecting the most affordable company for each type of insurance than you would save bundling policies under a single company.

2. Install home security devices

Installing security devices in your home can be an effective way of keeping your family and your belongings safe. But believe it or not, it can also be a way to help you save on homeowners insurance. Many companies offer discounts to homeowners who install security devices. Examples of devices that might help you save include burglar alarms, deadbolts, and fire and smoke alarms. Installing these devices can usually save you around 10% on your premiums.

While having these security systems in your home can save you money, keep in mind that you’ll also pay to install them. Security systems can cost many hundreds of dollars for the top-of-the-line products. You can also opt for a DIY security system, which costs less, and you can install it yourself.

3. Increase your deductible

Your deductible is the amount you’ll pay out of pocket before insurance kicks in and covers your financial losses. For example, if your deductible is $2,000, and a fire causes $5,000 worth of damage to your house, you’ll have to pay $2,000 yourself, while your insurance will cover the remaining $3,000. (See our guide to insurance deductibles.)

Some deductibles are dollar amounts, while others are a percentage of your overall coverage. By increasing or decreasing your insurance deductible, you can also adjust your insurance premiums. In general, increasing your deductible will reduce your premium, and vice versa.

A higher insurance deductible can be advantageous in that it saves you money each month on your premiums. But doing so also has its downsides. If you increase your deductible too much, you may end up with out-of-pocket costs that are unaffordable if something goes wrong.

4. Disaster-proof your home

Extreme weather such as wind, hail, and fire make up a large portion of homeowners insurance losses each year. A single natural disaster can cost a single insurance company millions of dollars. As a result, companies may be willing to offer discounts to homeowners who take steps to mitigate damage.

Disaster-proofing your home is the process of upgrading your home’s construction and materials to reduce the amount of damage it sustains in extreme weather or a natural disaster. Depending on where you live, you may want to guard against hurricanes, tornadoes, hail, earthquake, or wildfire. This can be especially advantageous in states with the most natural disasters, including California, Texas, Oklahoma, Washington, and Florida.

Disaster-proofing your home can help to save you money on homeowners insurance, as well as mitigating the emotional effects that come with losing your home or the valuables inside of it. But in some situations, the costs may outweigh the benefits. If you would need to spend thousands of dollars to disaster-proof your home, then the insurance savings may not be quite as enticing.

5. Choose certain dog breeds

Whether you realize it or not, your homeowners insurance policy likely covers medical costs you sustain if your dog bites someone on your property. Because of that, insurance companies may be inclined to increase your insurance premiums — or even deny you coverage altogether — if you have a breed that they consider more likely to bite someone. 

Dog breeds that may result in higher insurance premiums include:

  • Pitbull
  • Rottweiler
  • Alaskan malamute
  • Akita
  • Chow chow
  • Doberman Pinscher
  • Wolf hybrids
  • Mastiff
  • German shepherd
  • Siberian husky

You may be able to save money on homeowners insurance by choosing a dog breed that isn’t on the list above. But if you already have one of those dogs or are set on getting one, you can turn to one of the home insurance companies that will cover any dog breed: Amica, Chubb, Fireman’s Nationwide, State Farm, or USAA.

6. Adjust your coverage

The amount of coverage you buy is one of the most important factors in determining your homeowners insurance rates. In general, your rates will increase as you increase your coverage. Adjusting your coverage saves you money on your premium and ensures you aren’t paying for anything you don’t need. That said, the last thing you want is to reduce your insurance coverage, only to have an incident that your insurer can’t fully cover.

To determine the right amount of homeowners insurance coverage, consider the value of your belongings and the expected cost of rebuilding your current home in the event of a total loss. Ideally, you’d want enough coverage to fully replace everything. You can calculate the cost of replacing your home by researching your local construction costs per square foot and multiplying them by the total square footage of your home. And don’t forget to purchase any special coverage to cover valuables that may not be covered in your standard policy.

7. Consider excluding your land

You might think it’s best to buy enough home insurance coverage to match your home’s market value. But one thing to consider is that your property value includes the value of the land on which your home sits. And in the event of a fire or other total loss, you won’t need to replace the land. Therefore, you might consider deducting its value from your homeowners insurance coverage. You can find the value of your land by speaking to your local property assessor’s office.

There are some things you may want to consider before reducing your coverage. First, some situations may actually prevent you from rebuilding on your land in the event of a disaster. An example might be a storm on coastal land or ordinance changes that prevent you from building the same type of property. You also want to make sure that you’re not reducing your coverage so much that it no longer covers the full cost of replacing your home and belongings.

8. Compare quotes

Even once you account for everything else on this list, the premiums you’ll pay for homeowners insurance will still vary from one company to the next. As a result, it’s important to shop around before committing to one company. Some questions to ask yourself include:

  • How much coverage do I need?
  • What special coverages do I need that not every company offers?
  • What discounts might I be eligible for?
  • What company currently writes my other insurance policies?

Once you’ve narrowed down your search to the companies that meet your unique needs, you can use an online quote tool to get their rates.

Some of the cheapest homeowners insurance companies on the market include Amica, Erie, Nationwide, Progressive, and USAA.

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About the Authors

Adam Morgan

Adam Morgan Contributor

Adam Morgan is a former senior editor for Reviews.com. He's written about banking, credit cards, home warranties, insurance, and many other subjects (like running shoes) to give our readers the best information to assist in their buying decisions. His writing has been featured in The Los Angeles Times, Chicago Tribune, The AV Club, The Guardian, Chicago magazine, Minneapolis Star-Tribune, and elsewhere.