7 Ways to Lower Your Home Insurance Costs (2024)

You can lower your home insurance costs by shopping around for coverage, saving with discounts, and increasing your deductible.

Erin Gobler
Written byErin Gobler
Erin Gobler
Erin Gobler
  • 5+ years of finance writing experience 

  • Certificate of financial planning from Boston University

Erin is a personal finance writer and journalist with work featured in major publications. Her writing explores investing, credit cards, mortgages, insurance, and more.

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Ashley Cox
Edited byAshley Cox
Headshot of Managing Editor Ashley Cox
Ashley CoxSenior Managing Editor
  • 7+ years in content creation and management

  • 5+ years in insurance and personal finance content

Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.

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Updated June 7, 2024

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Home insurance premiums are set to rise 6% in 2024, according to a recent Insurify report. Though this is less of an increase than in the previous two years, it’s still a source of stress for many homeowners — and it’s likely rates will only continue to rise. The same report showed that nearly 30% of homeowners are nervous about rising premiums.

The good news is that even as homeowners insurance premiums rise, you can take steps to lower your costs by hundreds or thousands of dollars per year.

Quick Facts
  • The average cost of homeowners insurance in the United States is $2,377 for a policy with $300,000 in dwelling coverage, Insurify data shows.

  • The most effective way to save money on your premiums is to compare home insurance quotes from multiple companies — you can easily save hundreds of dollars per year this way.

  • You can save money in the short and long term by strategically choosing your policy coverage and deductible amounts.

1. Compare home insurance quotes from multiple companies

  • Potential savings: 47%

Shopping around for home insurance quotes is the most effective way to lower your premiums. The easiest way to shop around for coverage is to use an online comparison website. Rather than having to shop with multiple companies separately, you can complete one online form and get quotes from various companies at once.

To get home insurance quotes using a site like Insurify, you’ll simply complete the online form, providing information about yourself and your property. Once you’re done, you’ll enter your contact information and see quotes from different companies. When you’re ready to sign up for coverage, you can visit a partner website or call an insurance agent.

Average home insurance rates vary significantly, as you can see in the table below. The cheapest company has an average annual cost 47% lower than the most expensive company for a policy with $300,000 in dwelling coverage.

Insurance CompanyAverage Annual Premium
Erie$1,388
American Family$1,657
ASI Progressive$1,864
State Farm$1,988
Allstate$1,999
Auto-Owners$2,165
Travelers$2,213
Nationwide$2,223
Chubb$2,557
Farmers$2,623

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2. Improve your credit 

  • Potential savings: 26%

Your credit can affect your homeowners insurance premiums because it’s an indication of risk. A poor credit history may lead an insurance company to believe that you’re more likely to file a claim. An excellent credit score can save you hundreds of dollars per year on premiums.

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.[1]

Average Annual Premium by Credit Tier

Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers.

3. Bundle your home and auto policies

  • Potential savings: Up to 25%

Most insurers offer a discount when you bundle multiple insurance products.[2] 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.

Good to Know

In addition to offering you financial savings, bundling your policies can also help simplify your finances. Having all your coverage with one insurer makes it easy to manage your policies. And depending on the company, you may be able to pay a single premium for multiple policies.

4. Look for discounts

  • Potential savings: Up to 20%

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.

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

  • illustration card https://a.storyblok.com/f/162273/150x150/1d8803fded/credit-and-loan-96x96-blue_019-calendar.svg

    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.

  • illustration card https://a.storyblok.com/f/162273/150x150/41b171a645/types-of-houses-96x96-orange_026-mansion.svg

    New home

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

  • illustration card https://a.storyblok.com/f/162273/150x150/7e8db66d9f/protection-and-security-96x96-yellow_016-door-lock.svg

    Smart home

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

  • illustration card https://a.storyblok.com/f/162273/150x150/ef76aca096/house-rental-96x96-green_017-maintenance.svg

    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.

  • illustration card https://a.storyblok.com/f/162273/150x150/50605bc2ac/renewable-energy-96x96-yellow_025-solar-panel.svg

    Green home

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

  • illustration card https://a.storyblok.com/f/162273/150x150/b045612c49/house-rental-96x96-orange_045-value.svg

    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.

  • illustration card https://a.storyblok.com/f/162273/100x100/4d03c561b5/declaration-page.svg

    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.

When you’re shopping for insurance, pay attention to the discounts each insurer offers. If you find you’re eligible for more discounts with a particular company, you could end up with a lower rate.

5. Invest in home security

  • Potential savings: Up to 20%

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.

6. Increase your deductible amount

  • Potential savings: 3%

Your home insurance deductible is the amount you’ll pay out of pocket when you file a claim. There’s an inverse correlation between your deductible and your premium. Generally speaking, as your deductible amount increases, your premiums decrease.

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.

While a higher deductible can be an excellent way to save money, you have some other things to consider. A higher deductible means that when you file a claim, you’ll be responsible for more of the cost. You’ll have to weigh the short-term versus long-term potential savings, and it’s important to choose a deductible that you can easily afford if and when the time comes.

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.

Deductible AmountAverage Annual Premium
$500$2,457
$1,000$2,377

7. Make home improvements to reduce risk of disaster damage

  • Potential savings: Varies

You may be able to save money on your homeowners insurance by making your home more resistant to natural disasters. For example, some insurers offer discounts on policies when your home meets building standards set by Florida Building Codes or by the Insurance Institute for Business & Home Safety.

These home improvements can help reduce the amount of damage to your home if you’re in a major storm by helping them stand up to high winds. Depending on your insurer, the discount may only be available in certain states — Florida is the most common.

Discount amounts vary, but they may apply only to the windstorm coverage portion of your premium.[3]

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Other tips to save on home insurance

In addition to the strategies above, you can take other steps to save money on your home insurance premiums. Keep in mind that these won’t all be appropriate for everyone, so it’s important to understand your needs.

Understand replacement cost vs. actual cash value

A homeowners policy includes either replacement cost or actual cash value coverage. Replacement cost means your insurance policy pays the amount needed to replace your home and belongings in the event of a loss. Actual cash value, on the other hand, pays the replacement cost minus depreciation.

You can also purchase extended and guaranteed replacement cost coverages. These types of policies pay more than your coverage limit to replace your home to account for increased building costs.[4]

Keep in Mind

Generally speaking, the more coverage you have, the more expensive your policy will be. An actual cash value policy is likely to be the cheapest, while extended or guaranteed replacement cost may be more expensive. But you should choose the more affordable policy only if you’re confident you can pay the out-of-pocket costs that insurance won’t cover.

Don’t file claims for small incidents

When an incident happens, it can be tempting to file a home insurance claim, no matter what the cost. After all, isn’t that why you have insurance? In reality, filing claims for small incidents can actually cost you more money.

First, depending on the size of the claim and your deductible, your insurance company may not end up paying you anything for the claim. For example, if you have $800 worth of damage and a $1,000 deductible, you’ll have to pay the full amount.

Additionally, once you’ve filed a claim, there’s a chance your homeowners insurance premiums will increase. The small amount you’ll get from the claim — if any — will probably be lower than the additional premiums you’ll end up paying.

Consider flood insurance

Depending on where you live, it may be worth purchasing flood insurance. Though it’ll increase your home insurance costs in the short term, it could save you a lot of money in the long run. Just one inch of water in your home can cause up to $25,000 of damage, according to the Federal Emergency Management Agency (FEMA).

Standard homeowners insurance policies don’t cover flood damage. Instead, you must purchase flood insurance as a separate policy. If you live in a high-risk area, your lender may require you to purchase flood insurance. Even if you don’t live within a high-risk area, your lender may still require flood insurance. And even if they don’t, it may be worth purchasing if you’re concerned about flooding.

How to lower home insurance FAQs

Before purchasing homeowners insurance, read these additional tips to help you save money on your policy.

  • Can you negotiate home insurance rates?

    Homeowners insurance premiums generally aren’t negotiable. But you can increase or decrease your premiums by shopping around for the cheapest policy and adjusting your deductible.

  • What is the 80% rule when it comes to home insurance?

    The 80% rule states that you should insure your home for at least 80% of its replacement cost. If your coverage is lower than 80% of the cost, your insurance company may not pay the full price required to replace your home.

  • Can home insurance premiums decrease?

    It’s possible to lower your homeowners insurance premiums by comparing quotes, bundling policies, seeking discounts, and more. But all else being equal, it’s unlikely that the cost to insure your home will decrease over time — it’s more likely to do the opposite.

  • What’s one way to lower your home insurance costs?

    The most effective way to lower your homeowners insurance costs is to shop around for the most affordable coverage. You can save thousands of dollars per year by doing so. Other ways to save money include bundling your policies, taking advantage of discounts, increasing your deductible, and more.

Sources

  1. National Conference of State Legislatures. "States Consider Limits on Insurers’ Use of Consumer Credit Info."
  2. Insurance Information Institute. "How to save money on your homeowners insurance."
  3. Florida Department of Financial Services. "Premium Discounts for Hurricane Loss Mitigation."
  4. Insurance Information Institute. "How is the settlement amount determined?."
Erin Gobler
Erin Gobler

Erin Gobler is a personal finance writer and journalist based in Madison, Wisconsin. With more than five years of experience, Erin has covered topics such as investing, credit cards, mortgages, insurance, and more. Her work has been featured in major publications like Business Insider, Fox Business, and Time. Erin received her bachelor’s degree from the University of Wisconsin-Oshkosh in 2013, studying journalism and political science. She also received a certificate of financial planning from Boston University in 2022.

Ashley Cox
Edited byAshley CoxSenior Managing Editor
Headshot of Managing Editor Ashley Cox
Ashley CoxSenior Managing Editor
  • 7+ years in content creation and management

  • 5+ years in insurance and personal finance content

Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.

Featured in

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