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How to Lower Your Home Insurance Premium: Factors That Affect Your Homeowners Insurance Rates (2021)

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Jackie Cohen

By: Jackie Cohen

Edited by John Leach

Last Updated May 19, 2021

Why you can trust Insurify

Insurify partners with top insurance companies and is a licensed agent in all 50 states. However, the insurance experts writing our content operate independently of our partners. Check out reviews from over 3,000 satisfied customers, how we make money, our data methodology, and our editorial standards.

How can I lower my home insurance costs?

There are a lot of factors that contribute to your home insurance rates. There are also a lot of tips and tricks to follow to lower those rates.

Reassessing your home insurance coverage frequently is a smart way to stay on top of your expenses. By reviewing your policy on a regular basis, you’ll ensure that your insurance coverage matches your actual insurance needs.

With home improvements, remodels, and renovations, homeowners are frequently adding value, and sometimes risk, to their homes. These changes may result in a need for additional coverage and changes in insurance needs for your home. This may lead to higher premiums; however, better insurance coverage for the needs of your home will save you money later, in the case of an emergency. You could be able to cut your annual premium and say goodbye to higher rates if you know where to look that is. We’ll show you the way. Lower the amount of money you’re signing over each month!

Factors that Contribute to Your Insurance Premium

There are numerous factors that can affect your homeowners insurance rates. Seemingly random elements of your home, like the age of your roof, to attractive nuisances like trampolines and swimming pools, may have an impact on the cost of homeowners insurance.

Home Improvements and Changes

Major renovations, home improvements, and even simple changes in your home may have a great impact on your insurance costs. Whether it’s a remodeled kitchen or addition on top of your garage, home improvements and changes often add value to your home. When these changes are made, it’s vital your home insurance policy reflects the true value of your home, so you’re not stuck with exorbitant out-of-pocket expenses after an accident or disaster.

If you have added to the value of your home through improvements or renovations, reassessing your homeowners insurance coverage to reflect these changes is very important. If it was an expensive project, it’s probably expensive for your insurance company to replace it after damage. Therefore, on top of the construction costs of home improvements, your premiums will probably rise, but it will be worth the protection if an accident ever occurs.

Attractive Nuisances

Attractive nuisance: that sounds fun. Backyard fun, like swimming pools, diving boards, and trampolines, may make for a child’s oasis, but could seriously increase your insurance premiums. Insurance companies see great risk in covering such toys, that’s because lots of accidents happen on trampolines and in pools.

If someone is injured on your property due to an accident on one of these attractive nuisances, you may be liable for damages—even if you didn’t permit them to participate. Fencing in your pool (which is required by many municipalities, anyway), self-locking gates, and first aid equipment ready on hand, may increase safety in your backyard. Think twice about letting your teenager have a pool party without supervision.

Age and Materials of Your Home

As your home ages, it’s likely to become more susceptible to damage from weather or other natural occurrences—especially your roof. With older homes, replacement costs will increase as the projects get bigger and more expensive. If you haven’t replaced your roof in thirty years, the cost of your home insurance policy will likely reflect it.

Heating Source

If your home is heated with a wood-burning stove, you may see a significant increase in your home insurance premium. This is due to the increased fire risk a wood-burning stove poses to a home.

If you provide your insurance company with proof that your wood-burning stove was installed by a certified contractor, they may decrease your premium for meeting all requirements and codes. If you have a wood-burning stove as a heat source in your home, it is vital to take proper safety precautions, ensuring you have smoke detectors on all levels of your home, and fire extinguishers in easily accessible places. Also, teach your children what to do in case of a fire, and make sure every member of the family knows how to use a fire extinguisher.

Time at Home: Why WFH Could Pay Off

If you work remotely from home or run a business out of your home office, you may be rewarded by your home insurance company.

Insurance companies love when a member of a household is home throughout the day. That’s because rates of burglaries, fires, and other accidents decrease when someone is home, supervising a property at all hours of the day. Plus, if you run a business from your home, your standard home insurance policy will cover the electronics and equipment used for your work. You may be able to deduct the square footage of your home used for your business from your property taxes too.

Keeping Your Life at Home Safe and Secure

Home security systems can be a worthwhile investment in ensuring the safety of your property and family. Installing one of these alarm systems may result in a break from your home insurance company in the form of a cut in your premium. Plus, simple changes like replacing inadequate, weak locks with deadbolts can help you stay safe and reduce your homeowners insurance rate. Now is a great time to add that burglar alarm and dead-bolt locks.

Keeping your roofing and electrical system in good shape, and talking to your city about adding a fire hydrant to your street could also help you lower premiums.

Pets

Man’s best friend? Maybe to some, but dog owners may face challenges finding affordable homeowners policies if their dog breed is considered dangerous. Breeds considered aggressive, like pit bulls and rottweilers, can pose a much higher risk for home insurance companies.

According to the Insurance Information Institute, dog bites account for one-third of all homeowners insurance liability claims. More than half of all dog bites occur on a dog owner’s private property, resulting in hundreds of thousands of home insurance claims throughout the United States each year. Protect yourself, your neighbors, your mailman, and your wallet by choosing dog breed wisely.

Claims History

Insurance companies keep tabs on your claims history. The more claims you file, the higher your premiums may become. If your claims-filing habit is too large, some insurance companies may even terminate your policy, or refuse your renewal request. This is because, with increased claims, insurance companies see increased risk. Your claims history can contribute to your insurance score, a factor insurance providers consider when setting your rates.

How to Leverage These Factors to Your Advantage

All of the above elements of your profile are risk factors that home insurance companies take into account when quoting your homeowners insurance premiums. Policyholders have a few options when choosing their coverage levels that can lower these rates. Insurers allow homeowners to set their deductible and amount. By setting a realistic deductible but shooting for the higher end may lower your monthly premiums. However, you must be prepared to shell out your deductible amount prior to accepting a claim from the insurance company. Choosing a higher deductible or premium can be tricky, be sure to crunch the numbers first.

Keeping your financial health up to snuff is the number one way to keep your rates at an acceptable level. Your credit history and current credit score is the key indicator to insurers on what to charge you for monthly rates.

Insurance companies love loyal customers. They’ll even reward you if you bundle policies and create a multi-line policy within their company. This can include persoal lines of insurance for everything from your auto insurance to a supplemental flood insurance product. Bundling can save you big.

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FAQ: Factors that affect your home insurance premium

  • Yes. Your home insurance may affect what you pay in home insurance premiums. If you have a subpar credit score, insurance companies may see you as an increased risk that they are taking on, reflected in higher rates. If you have good or excellent credit, you may benefit from lower rates. There are long-term steps you can take to improve your credit score, but your credit history is no longer in your control and may result in higher costs.

  • Yes, of course you do! You will need to get quotes for a new home insurance policy that applies to your new home. Each house has unique needs and nuances. Even if you’re moving within the same city or town, the proximity of your home to the local fire department, the crime rates in your new ZIP code–these factors all affect your home insurance company. If you move, you’ll need to cancel your home insurance policy for your old home, and comparison shop with Insurify to find a fresh policy for your new home.

  • The condition of vital elements of your home’s construction, especially your roofing, will be reflected in your home insurance rates. If your area falls victim to a major rainfall, windstorm, or other extreme weather, your old roof could easily cave in or cause water damage to the remainder of your home. Shelling out some cash for home improvements will pay for themselves in the long run, especially for roofing.

    How to Unlock Home Insurance Savings: The Bottom Line

    From the age of your home to the breed of your dog, many elements of your home and your domestic life may impact what you pay in home insurance premiums.

    It’s vital that your home insurance coverage accurately represents the actual cash value of your home to protect your wallet after disaster strikes. Your homeowners insurance policy takes many things into account, make sure you’re aware of what you’re paying extra for.

    Keeping your home in good shape and taking extra precautions against natural disasters, like storm shutters for hurricane or windstorm-prone regions or a sprinkler system and fire extinguisher for at-home fire safety could lower rates.

    If you’re ready to cut costs on your home insurance policy, use Insurify , a simple insurance cost comparison platform that allows you to see dozens of quotes at once.

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  • Data scientists at Insurify analyzed over 40 million auto insurance rates across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page. The car insurance data includes coverage analysis and details on drivers' vehicles, driving records, and demographic information. With these insights, Insurify is able to offer drivers insight into how their car insurance premiums are priced by companies.

Jackie Cohen
Jackie Cohen
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Insurance Content Project Manager

Jackie Cohen is an insurance content project manager at Insurify specializing in property & casualty insurance educational content. She has years of experience analyzing insurance trends and helping consumers better understand their insurance coverage to make informed decisions about their finances.

Jackie's work has been cited in USA Today, The Balance, and The Washington Times.

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