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Why Is My Homeowners Insurance Cost So High? (2021)

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Adrian Coto

By: Adrian Coto

Edited by John Leach

Last Updated July 6, 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.

Is it possible to lower the cost of homeowners insurance policy without taking on risk?

Yes, by doing your own research, risk analysis, and due diligence, it is possible to save money on your home insurance without stressing about gaps in coverage.

Although you probably know this already, homeownership can be an expensive endeavor. Whether it’s keeping up with mortgage payments, fixing up inevitable wear and tear, or performing renovations, you’re going to be spending to keep your home up to date, and most importantly, protected.

The cost of homeowners insurance can vary from person to person and home to home, and for the most part, keeping your home protected is less expensive than not when considering the physical and financial risks. But even then, homeowners insurance can still be expensive, so what can you do to bring those insurance costs down while maintaining a solid and comfortable amount of coverage?

First, you should always compare your home insurance policy using a tool like Insurify. One form gets you 6+ quotes from top insurers in your area. Next, you should read on to discover how else you can lower your home insurance costs.

What Do Standard Homeowners Insurance Policies Include?

As mentioned previously, each home, homeowner, and situation is different. However, as far as policies go, you can expect some home insurance costs to come directly from the following sources:

  • - Homeowners Insurance Premiums: These are the monthly payments you make to your home insurance company in order to keep your policy active.

  • - Deductibles: This is the amount of money you must pay out of pocket before your insurance policy begins to cover specific costs. For example, if your home sustains $10,000 worth of fire damage, and your plan’s deductible is $3,000, you would have to pay $3,000 out of pocket before your policy begins to help you cover the cost of the remaining $7,000 in repair costs.

  • - Endorsements: These are optional additions to your homeowners insurance policy. For example, many standard insurance policies do not include coverage for a natural disaster such as an earthquake. However, if you pay for an add-on or endorsement that covers earthquakes, your home will be protected from earthquake-related damages as much as the coverage limits will allow.

While endorsements may not be included in standard home insurance policies, many insurers do include the following in their standard plans:

  • - Dwelling Coverage: This type of coverage effectively pays for covered damages (up to the coverage limit ) that affect the main structure of your home and any attached structures, such as garages. While there are a handful of perils that can be covered, be sure to check your plan for covered and excluded perils, in addition to checking whether the coverage is set for replacement cost or actual cash value.

  • - Personal Property Insurance Coverage: This type of coverage protects your personal property, such as furniture and clothing, if they are damaged. With standard insurance, there will be many caps in place that will limit how much of your personal property ’s monetary value is covered. If you have extremely high-value items, like jewelry or fine art, it might be a good idea to purchase an endorsement to expand your personal property coverage.

  • - Other Structures: This type of coverage affects any structures on your property that are not directly attached to the main house. This can include detached garages, sheds, fences, and other external structures.

  • - Personal Liability Coverage: Liability insurance typically covers the medical costs or other damages that result from being found financially responsible for injuries that take place on your property.

  • - Loss of Use Coverage: This helps you cover the costs of additional living expenses if your home is uninhabitable after a covered insurance claim. Much like personal property coverage, you may need an endorsement to expand coverage for loss of use.

  • - Medical Costs Coverage: This helps cover expenses for injuries sustained by someone who is not a part of your household, regardless of who is at fault.

While standard policies do generally cover many of the above items, it would still be worth your time to check with your insurance company or a trusted insurance agent to get a clear picture of what your plan actually covers so you are not surprised by any coverage gaps.

What Other Factors Affect the Cost of My Homeowners Insurance Policy?

There are a handful of factors that could have a direct impact on the overall cost of your homeowners insurance. Whether these factors result in higher or lower costs may or may not be up to you, but at any rate, it’s a good idea to know what they are so you can effect whatever change that you can:

  • - Plan Deductible: While this may not be a standard rule across all available insurance policies, a low deductible likely means you pay higher premiums. While this may seem attractive in the event that your home experiences covered damages, you still have to pay more each month for coverage. On the other hand, if you have a comfortable emergency fund to work with, you could opt for a plan with a higher deductible to get lower premiums. This way, you pay less each month to keep your insurance and can have your emergency fund help cover the higher deductible.

  • - Your Insurance Company: Simply put, home insurance companies are competing for customers nationwide. With that in mind, some may have higher insurance rates than others. Before you commit to a specific company, it might benefit you to shop around to find a company with lower rates. Just be careful and make sure you’re not inadvertently losing needed coverage just to lower your monthly payments.

  • - Your Home’s Age: Older homes are generally more expensive to insure because they often lack many of the safety features of newer homes. They also tend to be built with less sturdy materials than newer homes, although this might not always be the case.

  • - Your Home’s Roof: Roofs that are older or made with less sturdy material are more susceptible to windstorm damage. If your roof is made of sturdy material, like asphalt, you’ll likely pay a lower rate.

  • - Renovations: While renovations might be a huge source of expenses, they could ultimately lower your insurance rate. If you renovate your home and update various aspects (such as adding safety features like updated smoke detectors ), you could find your overall insurance cost go down.

  • - Crime Rate: If you live in an area with a high crime rate, you’ll likely pay higher rates each month. Insurance companies deem an area to be at risk of crime based on the number of burglary and vandalism claims they receive in that area. By adding a security system or upgrading to dead bolt locks, you could see your insurance rate go down.

  • - Your Dog: You may love your dog, but insurance companies make their own lists of what they consider to be “aggressive breeds” that are more prone to cause home damage (such as tearing up carpets or chewing furniture). If you own a dog that is considered to be an aggressive breed, your insurance rate can go up or you may be denied coverage altogether.

  • - Special Features: If you’ve installed things like swimming pools or trampolines, you may see your insurance rate go up. This is because extra amenities like these, while fun and enjoyable, create a higher risk of personal injury for you and your visitors.

  • - Your Claims History: If you are regularly filing insurance claims, your insurance company may view this as a sign that your property is riskier to insure. In short, the more claims you have in your claims history, the higher your insurance rate will be.

  • - Your Credit History: If you have a good credit score, your insurance company will take that to mean that you will always pay your premiums on time, and your rates will go down. If you have bad credit, then your rates will go up. Generally speaking, paying bills and paying off credit cards on time can help you maintain good credit.

  • - Excessive Coverage: It makes no sense to have coverage for things that your home is not at risk of experiencing. For example, if you do not live in an area that has frequent wildfires, maybe don’t spend the extra money on expanding wildfire coverage. The same goes for things like flood insurance or earthquake insurance.

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How Can I Lower My Monthly Home Insurance Rate?

There are plenty of ways that you can bring your monthly cost down. However, before you do anything with your insurance, it may help to get a clear picture of the state of your home, the coverage you need to combat risks inherent to your property and area, and the rates offered by the insurance companies available to you.

By doing the research on your property and the general area, you can get a better idea of what endorsements to pay for and which ones to pass on. You can also get a solid idea of upgrades that your home might need, such as safety and security features. Finally, by shopping around and comparing plans/companies, you can find the winning combination of appropriate coverage and lowest homeowners insurance rates.

You should also look into discounts from your insurance company. These discounts will save you money and are usually given out to reward safe and thoughtful homeowners. Some of the more common discounts include:

  • - Claims-Free: For discounts like this, no news is good news. Depending on the company, homeowners who have not filed a claim for roughly three to five years can be eligible for a discount.

  • - Bundling: Some companies offer bundled insurance policies at discounted rates. For example, you could potentially get both your home insurance and auto insurance bundled into one overall plan. Insurance companies do this to encourage their customers to take advantage of other insurance-related services.

  • - Safety and Security: Some insurance companies reward policyholders who make the effort to anticipate potential risks. With that in mind, your insurance company may offer a discount if you have up-to-date home security and safety systems, such as fire alarms, central security, deadbolts, or security cameras.

If you’re interested to see what discounts your insurance company has to offer, be sure to contact them to see if you qualify for any. You have virtually nothing to lose by asking, or you could potentially qualify for one by making requisite investments and upgrades to your home.

FAQ: High-Cost Home Insurance

  • It would be entirely possible for you to save money by forgoing any endorsements and relying solely on your basic policy. The major downside to this would be that you would be at massive financial risk if anything outside of the basic coverage happens.

    The best thing for you to do is research what risks your home could potentially face and sign up for only the extra coverage that you need.

  • While running a business out of your home won’t necessarily cause your insurance rate to go up, there are inherent risks and corresponding coverage that you’ll need to consider. For example, it might be to your benefit to sign up for endorsements that expand your liability coverage if you frequently have customers visiting your home or personal property coverage if you require expensive equipment to maintain your business. Some insurance companies also offer in-home business policies that are similar to commercial business policies but typically have lower coverage limits and premiums. Also, some of these in-home business policies offer coverage if your home and business are affected by covered damages. In cases like this, you could be covered for income that your business loses, employee payroll, and various other expenses.

  • It never hurts to have extra information, especially if it’s coming from third-party sources as opposed to insurance companies themselves.

    For more information on trends in the homeowners insurance industry, you can consult the Insurance Information Institute, which seeks to help consumers manage insurance-related risks, make educated decisions, and see the value of their insurance. You can visit their website at www.iii.org. Alternatively, you could also reach out to the National Association of Insurance Commissioners. The NAIC seeks to facilitate and support regulators in ensuring that consumers are protected from insurance practices that actively go against their interests. If you think an insurance agent or company is acting in bad faith, you can visit the NAIC website (content.naic.org) for resources or to file a complaint.

Lower Your Monthly Premium by Researching and Anticipating Risks

If you’re a homeowner, paying for homeowners insurance is unavoidable if you want to have at least some level of protection. However, you can help save yourself some money if you take an active role in your homeownership. As mentioned previously, do your due diligence to understand what risks your property faces, and take action accordingly.

Has your insurance rate gone up because your area has been deemed to have a high crime rate? Invest in a security system and dead bolt locks to potentially qualify for discounts. Haven’t filed a claim in a long time? Reach out to your insurance company to get them to lower your monthly rate.

You can take an active role in lowering your monthly home insurance premium, and with the right steps and the right information, you can pay less without losing needed coverage.

And don’t forget to use Insurify to find a better rate. Compare 6+ real quotes in under five minutes!

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Adrian Coto
Adrian Coto

Insurance Writer

Originally from Los Angeles, California, Adrian Coto is a writer living in Brooklyn, New York. A graduate of the NYU Creative Writing MFA program, he's worked as a legal assistant, a law school administrator, and now as a copywriter and editor.

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