A home insurance policy can protect your home and belongings against potential risks such as fire, theft, or natural disasters. While home insurance is beneficial, it is an added expense, and the ability to lower insurance costs can be appealing.
One common way to lower insurance costs is by increasing the deductible, which is the amount you pay out of pocket before insurance coverage kicks in during a claim. You can reduce your premium payments with a higher deductible, making home insurance more affordable.
However, lowering the deductible is not the only way to pay less on your home insurance. Look into lesser-known discounts, such as the following:
- Increase Your Home Security
- Reduce Your Risk of Fire Damage
- Bundle Your Policies
- Make Home Improvements
- Ditch the High-Risk Stuff
- Raise Your Credit Score
- Ask About Other Special Discounts
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1. Increase Your Home Security
Installing home security systems is a simple way to lower your insurance premiums. These systems include options such as:
- Burglar alarms
- Deadbolts
- Surveillance cameras
Typically, an insurer will offer you a discount for any of these security measures because it helps to reduce the risk of you having to input a claim, thus saving them money.
Most insurers offer a discount between 5 and 20%. For example, if you have a Ring doorbell that has a camera and records movement, the insurance company may offer you a 10% discount because you are helping to reduce risk. So, instead of your home insurance premium being $1,000 yearly, it can be $900.
2. Reduce Your Risk of Fire Damage
Consider adding additional fire protection to your home. Installing fire safety measures — such as fire alarms, extinguishers, and sprinkler systems — can result in insurance premium discounts.
Insurance companies offer these discounts because they help reduce the loss. Most insurers offer a 5% to 20% discount for alarms, while fire extinguishers may earn a 2-5% reduction in premiums.
A residential sprinkler system can offer a more substantial discount, often around 15% or more. If you install any of these fire safety mechanisms, keep them maintained to continue earning the discount.
3. Bundle Your Policies
Bundling insurance policies involves purchasing multiple types of coverage from the same insurer, such as home and auto insurance. This is a great way to earn a discount because it helps keep everything in one place, reducing confusion for you and the insurer.
If you bundle your policies with the same insurance company, you can expect a discount of 5% to 25%. For instance, combining home and auto insurance could result in a 10-20% discount on each policy. Some insurers even offer discounts for adding a life insurance policy, renters policy, and even motorcycle insurance.
4. Make Home Improvements
If you have made home improvements, discuss them with your insurance company because a discount could be available. You may earn a deal with the following updates:
- Storm shutters
- Plumbing updates
- Electrical updates
- Roof replacements
- Energy-saving updates
These updates help reduce loss in the event of a covered peril, like a storm, so giving you an incentive to make home updates is beneficial for your insurer.
If you have not done any of these types of updates in a few years, consider doing so as it can help you lower your insurance premiums. The long-term savings you could experience will help justify the cost of the improvements.
5. Ditch the High-Risk Stuff
While you may not receive a specific discount for not having any high-risk items at your home, you will save money. Most insurance companies do not want you to have features such as a swimming pool, trampoline, certain dog breeds, and even playground equipment because it increases the risk of injury for others, which could result in a liability claim.
If you have these high-risk items, your policy most likely contains a surcharge related to the item. Your policy could even have an exclusion. For example, if you have a trampoline, it and any claims related to it could be excluded. Avoid this and reduce your premium by not having these high-risk items.
6. Raise Your Credit Score
Credit scores significantly affect insurance premiums because insurers use them to predict risk. The higher the credit score, the lower the premiums — and the lower the score, the higher the costs due to the risk seeming to be higher.
Someone with an excellent credit score might pay $1,000 for homeowner’s insurance, while someone with a poor credit score might pay $2,500 for similar coverage. If you have a lower credit score, you should try to increase it by ensuring your bills are paid on time and your credit utilization is on the lower side.
7. Ask About Other Special Discounts
There are so many discounts available from different insurers that it would be impossible to list them all, but some lesser-known discounts include:
- Auto-pay: Many insurers offer a discount for signing up for automatic payments.
- Going paperless: Get your policy docs and bills emailed, rather than sent through the mail, and you could get a discount.
- Military: Some insurers offer a military discount.
- Occupations: Certain professions, such as medical or education, can earn a discount.
If you want to see what discounts are available to you from your current insurance company, call them to ask what they have available. Review your policy for any discounts you might already be receiving, and compare them to this article.
Shop Around for the Best Price
There are several discounts that can be earned on a homeowner’s insurance policy, some of which you may already qualify for. You should contact your insurer to discuss what discounts are available.
Don’t be afraid to contact other insurance companies to get quotes and compare discounts because they all differ. Sometimes, even if your current insurance company offers many discounts, switching may still make sense. Always explore your options and compare coverage, discounts, and rates to make the best decision for you.