How to Lower Home Insurance Costs: 9 Smart Ways to Save

Hail, severe storms, wildfires, and other weather disasters, along with high rebuilding and repair costs, continue to push home insurance rates higher. In fact, Insurify data analysts predict the national average cost of homeowners insurance could increase by another 4% by the end of 2026.

The annual average cost to insure a home with $300,000 in dwelling coverage is $2,868, according to Insurify data. Nationally, Shelter has the cheapest rates for this level of dwelling coverage.

Comparing homeowners insurance rates from multiple companies could help you find the best price on the coverage you need. In fact, comparison shopping is one of the most effective ways to lower your premiums.

9 ways to save on your home insurance

Cutting back on coverage to save money isn’t a good option for most homeowners, especially if you have a mortgage. Reducing your coverage could leave you on the hook financially if you need to file a homeowners insurance claim.

Here are some strategies to help you save on your home insurance while preserving the protection your policy gives you.

Saving Strategy	Savings Potential	Good to Know
Compare rates	47%	The most effective way to lower premiums
Increase your deductible	3%	Increasing your deductible means more out of pocket if you have to file a claim
Boost security	Up to 20%	Security upgrades can lower your risk of filing a claim
Seek discounts	Up to 20%	Most insurers offer multiple discounts; you may qualify for more than one
Bundle home and auto	Up to 25%	Many insurers provide significant discounts for bundling
Avoid small claims	Varies	Claims can increase your premiums at renewal time
Take care of your credit	26%	Actuarial data shows people with lower credit scores are more likely to file claims
Invest in home hardening improvements	Varies	Improvements to make your home more resistant to weather risks can lower premiums
Consider actual cash value	Varies	Insurers take on less risk with ACV policies, so you pay less premium

1. Compare multiple home insurance rates

Home insurance rates can vary significantly among insurance companies, so it’s a good idea to get quotes from at least three insurers. Online comparison sites make it easy to compare quotes, coverages, and insurance companies all in one place.

Here’s a comparison of some of the cheapest home insurance companies, based on Insurify data. Quotes are for a policy with $300,000 in dwelling coverage.

The below national rates are estimated rates current as of: Wednesday, July 15 at 5:00 PM PDT. 

Data reviewed by Chase Gardner

Chase GardnerData Insights Manager

• Data expert on auto trends and driver behavior

• University of Chicago graduate with statistics degree

Chase spearheads analytics for Insurify’s data insights team. With his deep expertise in insurance data, Chase is often interviewed on industry trends.

Featured in

Insurance Company	Average Annual Premium
Grange	$1,368
CSAA	$1,416
Amica	$1,584
AIG	$1,740
Westfield	$1,812
National General	$1,968
USAA	$2,028
American Family	$2,196
AFI	$2,232
Foremost	$2,484
Mercury	$2,484
Allstate	$2,496
Travelers	$2,508
ASI	$2,580
Farmers	$2,772
State Farm	$2,820
Auto-Owners	$3,060
Encompass	$3,276
Nationwide	$3,360
Erie	$3,396
Country Financial	$3,564
Chubb	$3,696
Allied	$3,972
Metropolitan	$4,332
Shelter	$4,344

2. Increase your home insurance deductible

Your home insurance deductible is the amount you’ll pay out of pocket when your insurance company pays a claim. A higher deductible can give you a lower premium, since it reduces your insurer’s financial risks. But it means you’ll pay more out of pocket if you have to submit a claim.

Homeowners insurance deductibles can be as low as $100 or as high as $5,000. They most often range from $500 to $2,000, and the most common deductible is $1,000.

The table below shows how your premium can change based on which deductible amount you choose. Rates shown are for a policy with $300,000 in dwelling coverage.

3. Add home security features

Some homeowners insurance companies offer a discount when you invest in home safety features. In addition to providing you with peace of mind, these features reduce your chances of having to file a claim and may reduce the damages for any claims you file.

Some examples of upgrades you can make to receive a home security discount include fire and smoke detectors, automatic sprinkler systems, home security systems with burglar alarms or cameras, and more.

4. Ask about discounts

Discounts can help you save on your homeowners insurance without sacrificing coverage. Home insurance discounts generally fall into three categories: those specific to you, those specific to your home, and those specific to your policy. Ask your insurer what discounts you qualify for. You may qualify for more than one.

While discounts vary from one insurer to the next, these are a few common ones:

Claims-free

You can save on your home insurance premiums if you’ve gone a certain amount of time, such as five years, without filing a claim.



New home

Some insurers offer a discount for new homes — either new builds or simply new to you, depending on the company.



Smart home

If your home is equipped with smart home technology, you may be able to save on your home insurance premiums.



New/upgraded roof

You may be able to get a discount for either having a new roof or having a roof made of certain materials.



Green home

Some insurers offer a discount for homes that are considered “green” based on certain certifications.



Payments

You may be eligible for a discount on your premiums for either paying your premium in full or setting up automatic payments on your policy.



Early signing

If you shop and sign up for insurance at least seven to 10 days before you need coverage, you may be eligible for a discount.

5. Bundle your home and auto policies

Most insurers offer a discount when you bundle multiple insurance products.^[1] For example, you could save money by having your home insurance policy and car insurance policy with the same company. And in some cases, you can add your life insurance or umbrella insurance too.

6. Avoid small home insurance claims

You buy home insurance for financial protection in case of big problems. But you shouldn’t use it every time your home has covered damage. Small claims can cost you money in the long run because they can lead to premium increases when your policy renews.

Generally, it’s not worth filing a small home insurance claim if:

• The repair cost is less than your deductible. 

• The repair cost is a bit more than your deductible, but you have savings to easily cover the repair.

7. Maintain good credit

Insurance data indicates people with lower credit scores are more likely to file claims than people with good or excellent credit. Homeowners with better credit typically see lower home insurance rates. 

For example, people with excellent credit pay an average of $2,604 per year for a policy with $300,000 in dwelling coverage. The average cost for people with poor credit is $3,433 annually.

Some states limit insurance companies’ ability to use credit history to set insurance premiums. California, Hawaii, Maryland, and Massachusetts prohibit companies from using credit history in customer premiums. Other states — including Alabama, Delaware, Florida, Illinois, New Mexico, Oklahoma, Texas, Vermont, and Washington — prohibit states from using a lack of credit history as a factor.^[2]

8. Report disaster-resistant home improvements

You may be able to save money on your homeowners insurance by making your home more resistant to natural disasters. Some insurers offer discounts for weather-resistant home improvements, like adding storm shutters, installing a new hail-resistant roof, or wildfire-proofing your landscaping.

If you make disaster-resistant upgrades, be sure to inform your insurance company and ask for a discount. Discount amounts vary, but they may apply only to the windstorm coverage portion of your premium.^[3]

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9. Consider actual cash value over replacement cost

When you buy a home insurance policy, you’ll have the option to choose how it values covered claims. You can choose replacement cost or actual cash value (ACV).

Generally, if you have replacement cost coverage, your policy will pay what it costs to replace or repair your property, up to your policy’s limits. If you have ACV coverage, your policy will deduct depreciation from your payout in case of a covered claim.

Because ACV reduces your insurance company’s financial burden in case of a covered loss, it’s typically cheaper than a policy that pays at replacement cost. Just be aware, though, you’ll usually pay more out of pocket for repairs when you have actual cash value coverage.

How to lower home insurance FAQs