9 Ways to Lower Homeowners Insurance Rates

Taking advantage of lesser-known homeowners insurance discounts and other creative approaches can help you save.
Apr 19, 2022

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Homeowners insurance rarely gets much attention, but it could be quietly costing you more money than it should.

The good news is that insurers provide a variety of discounts and incentives that can help you lower your homeowners insurance premium.

Here are nine ways to save.

1. Raise your deductible

A quick way to reduce your premium is to raise your insurance deductible, the amount you pay if you have to make a claim. If you had, say, a $1,000 deductible, you could save an average of 12% a year by increasing it to $2,500, according to NerdWallet's rate analysis.

Raising your deductible puts money in your pocket every month that otherwise would have gone to your insurer. Just be sure you have enough saved to cover a bigger out-of-pocket expense if you need to make a claim.

2. Make your home more secure

Even the basics can save you money when it comes to home security.

Having a smoke detector, burglar alarm or deadbolt locks on your home can earn you a 5% discount, says Mark Friedlander, spokesperson for the Insurance Information Institute. Adding a comprehensive sprinkler system along with an actively monitored fire and burglar alarm could save you as much as 15% to 20%, he says.

3. Skip small claims

It may be tempting to file a claim with your insurer even when something relatively minor happens, but you may be better off in the long run if you pay out of pocket for these smaller expenses. That’s because some insurers offer discounts if you remain claim-free for a certain period of time, usually a few years.

How much can filing a claim affect your rates? Submitting a claim for wind damage raises your annual cost of insurance by about 9%, on average, according to a recent NerdWallet analysis. A water claim costs you even more, raising your annual rate by about 19%, on average. If your claim is relatively minor, you could end up paying more in rate increases than the insurer pays out.

4. Ask about lesser-known discounts

Unless you check, you may never know what other savings you might be eligible for. Some insurers offer additional homeowners insurance discounts if you:

  • Don’t have any smokers living in the house.

  • Recently bought your home.

  • Pay your premium via automatic bank payments.

  • Choose paperless billing.

  • Work in a specific career, such as teaching, engineering or firefighting.

5. Account for home improvements

If you've improved your home, you may have made yourself eligible for homeowners insurance discounts without even realizing it. Adding features such as storm shutters and impact-resistant roofing — which make your house tougher to damage — could result in insurance savings. You might also earn a discount by upgrading outdated plumbing and electrical systems.

“You can often request a new inspection of your home to evaluate these improvements to maximize your potential discounts,” says Jessica Hanna, spokesperson for the American Property Casualty Insurance Association.

6. Bundle your auto and home insurance

Bundling auto and home insurance with the same company typically saves you 5% to 15% on your homeowners premium, according to data from the Insurance Information Institute. Although it could vary depending on your company, many insurers provide discounts if you buy more than one type of policy from them.

7. Build your credit score

It may surprise you to learn that your credit score can have a substantial impact on your home insurance premium. That’s because in most states, companies can use a credit-based insurance score to determine your rates. If your insurer thinks your credit score is too low — such as a FICO score under 630 — you may pay higher rates.

If you find that your credit score is low, read your credit report closely to identify any errors. You can elevate your score by taking steps like paying bills on time and reducing credit card balances. Learn more about how to build credit.

8. Get rid of high-risk stuff

Even though it may be fun, having something deemed an “attractive nuisance” by your insurer — think trampolines, swimming pools or playground equipment — can add to your homeowners insurance premium.

An attractive nuisance is a feature on your property that children could be tempted to play on. If they get injured while doing so, you could be held legally responsible. Because insurers consider this a liability risk, getting rid of those items could save you money on homeowners insurance.

9. Shop around

Rates for identical homeowners insurance coverage can vary widely from one company to the next. Some homeowners could save $1,000 or more a year by finding the cheapest rate, NerdWallet research shows.

Many companies have tools on their websites that allow you to plug in some basic information and get quick home insurance quotes. Comparing different companies’ rates will let you see if you might be able to save by switching insurers. You can also ask an independent insurance agent or broker to shop around on your behalf.

Not sure where to start? See NerdWallet’s roundup of the cheapest homeowners insurance.

Methodology

NerdWallet averaged rates for 40-year-old homeowners from a variety of insurance companies in every ZIP code across all 50 states and Washington, D.C. Sample homeowners were nonsmokers with good credit living in a single-family, two-story home built in 1997. They had a $1,000 deductible and the following coverage limits:

  • $300,000 in dwelling coverage.

  • $30,000 in other structures coverage.

  • $150,000 in personal property coverage.

  • $60,000 in loss of use coverage.

  • $300,000 in liability coverage.

  • $1,000 in medical payments coverage.

We used the same assumptions for all other homeowner profiles, with the following exceptions:

  • For homeowners with a claims history, we added a single wind or water damage claim.

  • For homeowners with a higher deductible, we raised the deductible to $2,500.

These are sample rates generated through Quadrant Information Services. Your own rates will be different.

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