Five Ways to Lower Your Homeowners Insurance

Buying a home is one of the most exciting moments in anyone’s life, but the associated costs can quickly add up. One often-overlooked expense is homeowners’ insurance, which, while essential, can significantly impact your monthly mortgage payment if included in your escrow. Unfortunately, homeowners’ insurance premiums have been rising in recent years, largely due to increased risks associated with climate change. Extreme weather events, wildfires, and flooding are making insurance companies reassess their risk models, causing rates to spike.

But don’t worry, there are still ways to save. Here are five smart strategies to lower your homeowner’s insurance and keep your overall housing costs in check:

1. Raise Your Deductible

A deductible is the amount you’re responsible for paying out of pocket before your insurance coverage kicks in. By opting for a higher deductible, such as moving from $500 to $1,000, you could save as much as 25% on your premiums. This could make a noticeable difference in your monthly expenses. However, it’s important to weigh the pros and cons: while you’ll save on monthly premiums, you’ll need to ensure you have enough savings to cover the higher deductible in the event of an emergency. If you’re comfortable setting aside a bit of cash for those “just-in-case” situations, this can be a great cost-cutting measure.

2. Bundle Your Insurance Policies

If you own a car, boat, or even a motorcycle, bundling your insurance policies can lead to substantial savings. Many insurance companies offer multi-policy discounts when you combine your homeowner’s insurance with your auto or other types of coverage. Bundling not only simplifies your billing but also lowers your total insurance costs, making it a win-win.

3. Upgrade Your Home Security

Insurance companies often provide discounts for homes equipped with security systems, as they reduce the risk of theft and vandalism. Installing features like burglar alarms, security cameras, or smart home monitoring systems can lead to lower premiums. Beyond the financial benefits, you’ll gain peace of mind knowing your home and loved ones are safer from potential threats. Some insurers also offer discounts for installing smoke detectors, deadbolt locks, and fire alarms, so consider these upgrades for added savings.

4. Maintain Good Credit

Your credit score plays a bigger role in your homeowners insurance premium than you might think. Insurers often use credit-based insurance scores to determine how likely you are to file a claim. A solid credit score signals that you’re financially responsible, which may earn you a lower premium. If your credit could use some work, consider focusing on improving it by paying bills on time, reducing debt, and monitoring your credit report for inaccuracies. Over time, better credit could lead to lower insurance costs.

5. Shop Around and Compare Quotes

Insurance rates can vary dramatically from one company to the next, so it pays to shop around. Don’t settle for the first quote you get—compare policies from multiple insurers to find the best deal. Be sure to look at what’s covered under each policy, not just the price. Inexpensive coverage might leave out crucial protection, which could cost you more in the long run. By taking the time to research and compare, you can make sure you’re getting comprehensive coverage at a competitive price.

A Final Tip: Review Your Coverage Annually

As your home and needs evolve, so should your insurance policy. Each year, review your homeowner’s insurance to ensure you’re not over-insured or under-insured. For example, if you’ve paid off part of your mortgage or made significant improvements, it might be time to reassess your coverage levels or shop for better rates.

With homeowners’ insurance premiums on the rise due to climate change and other factors, it’s more important than ever to be proactive about finding ways to lower your costs. These five strategies can help you keep your insurance more affordable while ensuring your home is protected.