If your homeowners insurance renewal made you wince this year, you’re in good company. Premiums have risen sharply in many parts of the country, driven by severe weather, higher rebuilding costs, and reinsurance prices. You can’t control any of that. But you can control quite a bit about your own policy.
1. Shop around — seriously
Prices for the same home can vary widely between insurers. Get at least three quotes every year or two, using identical coverage amounts so you’re comparing fairly. An independent agent can quote several companies at once. Before you switch, read what a policy actually covers; our Stonegate homeowners insurance review is an example of what to look for.
2. Raise your deductible
Moving from a $1,000 to a $2,500 deductible can noticeably reduce your premium. Only do it if you could comfortably cover that amount from savings. The logic is the same as with car insurance deductibles. Note that many coastal policies have separate percentage-based wind or hurricane deductibles.
3. Bundle home and auto
Multi-policy discounts are among the biggest available. Still compare the bundle against separate policies — occasionally two different companies are cheaper.
4. Upgrade your roof (when it’s time)
Roof age and material matter a lot to insurers. If you’re replacing your roof anyway, impact-resistant shingles can earn discounts in hail-prone states, and some states have programs to help fund wind-resistant upgrades. If you’re financing the work, see home equity loan vs. HELOC.
5. Add protective devices
Monitored security systems, smoke and fire alarms, deadbolts, and water-leak sensors or automatic shutoff valves can qualify for discounts. Water damage is one of the most common claims, so leak detection is worth it on its own.
6. Improve your credit
In most states, insurers can use a credit-based insurance score in pricing. Paying on time and keeping credit utilization low may help at your next renewal.
7. Avoid small claims
Claims history follows you through industry databases. Filing for a $1,800 repair on a $1,000 deductible may cost more in future premiums than it pays out. Save insurance for real losses.
8. Ask about every discount
Loyalty, claims-free history, new home, paperless billing, paying in full, retiree, professional association, or being a nonsmoker. Discounts vary by insurer and state, so ask directly — and use the tips in how to negotiate your bills.
9. Review your coverage limits — carefully
Make sure dwelling coverage reflects the cost to rebuild, not your home’s market value (which includes land). Some people are overinsured on personal property or carry endorsements they no longer need. But don’t cut dwelling coverage below rebuild cost or drop liability to save a few dollars; that’s where people get hurt after a disaster. If your assets have grown, an umbrella policy is often a more efficient way to add liability protection.
What not to cut
- Replacement cost coverage for the dwelling
- Adequate liability limits
- Flood insurance if you’re in or near a flood-prone area — standard policies don’t cover flooding. See FloodSmart.gov, the National Flood Insurance Program’s site.
If you can’t find coverage
In some high-risk areas, private insurers have pulled back. Most states have a FAIR plan or similar insurer of last resort. Your state insurance department, findable through the NAIC directory, can explain your options.
Bottom line
Shop every year or two, raise your deductible to a level you can afford, bundle, and ask for every discount. Invest in upgrades that reduce real risk. Just don’t trim the coverage that protects you from a catastrophic loss — that’s the whole point of the policy.
