Inflation is making life more expensive than ever, and home insurance is no exception to the trend. Average premiums have reached nearly $2,500 per year, according to NerdWallet’s rate analysis. But most carriers offer a variety of homeowners insurance discounts to help you save.
How do homeowners insurance discounts work?
Discounts are a way for insurance companies to reward certain customer behavior. For example, you might get a discount if you have a security system, as that reduces the chance your home will be burglarized.
Many discounts are stackable, which means you can combine more than one to get extra savings. But keep in mind that a company with lower base rates may offer a better deal for you than a company with lots of discounts. The best way to be sure is to shop around regularly.
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Answer a few questions to see custom quotes and find the right policy for you. The most common home insurance discounts
Home insurance discounts can be grouped into three buckets: customer-related discounts, policy-related discounts and home-related discounts. Read on to see which ones you may be eligible for.
Be aware that not all insurers offer all of these discounts. Some may be available only in certain states.
Senior citizen discount. Some insurance companies offer discounts to homeowners who are over a certain age.
Discount for specific occupations. For example, Farmers offers savings to people in certain professions, such as teachers or firefighters.
Military discount. If you're an active or retired member of the military, you might qualify for a home insurance discount.
Multipolicy discount. If you buy more than one policy from the same company, you'll usually get a bundling discount. This is often one of the biggest discounts available. For example, some home and auto insurance bundles can save you up to 40% off premiums.
Claims-free discount. If you haven't filed a home insurance claim in a while, you might be eligible for a discount. Usually, you have to be claims-free for at least three to five years.
Loyalty discount. Some insurers reward customers for keeping their homeowners policies for a certain number of years.
New customer discount. On the flip side of the coin, you can often get a welcome discount when you first buy your policy.
Prior insurance discount. As a way of enticing new customers, some companies may reward you for loyalty to a previous insurer.
Payment method discount. You can often save money by signing up for automatic payments or paying annually rather than monthly.
Paperless statements discount. You may qualify for a discount for choosing to receive paperless statements.
Discount for paying on time. Some insurers will give you a discount for consistently paying your home insurance premiums by the due date.
Discount for getting a quote in advance. Shop ahead at least a week before you need your coverage to start, and you could earn a discount with companies like Allstate.
Rent-to-own discount. Amica offers this unique discount. As a renter insured with Amica, you can earn up to $500 to use toward a future homeowners insurance policy.
Security systems discount. If your home has features like burglar alarms or a monitored security system, you might be eligible for a discount. These systems can help reduce the risk of theft and burglary, making your home less risky to insure. See the best home security systems.
Home safety features discount. Installing deadbolt locks, reinforced windows and sturdy roofing can help lower your insurance costs.
Smart-home discount. You can shave money off your premiums by installing certain smart-home devices. These could include video doorbells, water leak detectors, electrical sensors and more.
Fire safety discount. Homes with fire-resistant materials, sprinklers and fire extinguishers could qualify for discounts because they reduce the risk of fire damage.
New or renovated home discount. Insurers generally consider newer homes less risky to insure because they have up-to-date construction. If your home is newly built or you've recently done significant renovations, you might qualify for a discount.
Recent homebuyer discount. Even if your home isn’t new, but it’s new to you, it might qualify for a discount. Companies like Travelers and Nationwide offer savings to those who’ve bought their place within the past 12 months.
Nonsmoker discount. Nonsmoking households have a lower risk of fire-related incidents, so insurers may reward you for not smoking inside your home. For example, Farmers offers savings if everyone in your household has been smoke-free for at least two years.
Location-based discount. Your home's location can also affect your insurance rates. For instance, living in a gated community can lead to discounts.
Green home discount. Another unique discount is this offering from Travelers, which rewards people with LEED-certified homes.
How to get homeowners insurance discounts
Many discounts are applied automatically to your policy when you get a quote for home insurance online. If you’re working with an agent, ask which discounts may be applicable for your home. Tell them about any upgrades you’ve made, like installing smart-home devices or updating major systems.
You don’t have to wait until your policy is up for renewal to contact your insurer about discounts. You can call or get quotes any time.
🤓 Nerdy Tip
Keep in mind that some discounts require more cost or effort to get than others. For instance, it’s easy enough to sign up for paperless statements and save a few bucks. But should you shell out for a security system just to get a home insurance discount? The math might not add up. Other ways to save on home insurance
Discounts aren’t the only way to save on home insurance. These options may also help lower your costs.
Choose a higher deductible
Your home insurance deductible is the amount you pay out of pocket before insurance will cover a claim. Choosing a higher deductible can lower your premiums. For example, raising your deductible from $1,000 to $2,500 can save you an average of 9%, according to NerdWallet’s rate analysis.
Just make sure you can comfortably afford the amount you’d have to pay if you file a claim.
Keep your credit in good shape
In most states, having good credit can help you get lower insurance rates. This includes paying your bills on time and managing your credit responsibly. People with poor credit pay 72% more for home insurance on average than those with good credit, according to NerdWallet’s rate analysis.
Avoid making small claims
While insurance is there for times of need, consider paying for smaller expenses yourself instead of filing claims. Frequent claims can lead to higher premiums. People with a recent claim pay 10% more for home insurance on average than those with a clean history, NerdWallet found.
Review your coverage every year
Review your policy regularly and make sure you're taking advantage of all the discounts you're eligible for. Consider bundling your home insurance with other policies to save even more. See the best home and auto insurance bundles.
🤓 Nerdy Tip
Bundling doesn’t always offer the cheapest premiums. Compare quotes for home and auto insurance both together and separately to be sure you’re getting the best deal. Shop around
As you shop around, don't settle for the first quote you receive. Insurance companies offer different discounts, so get at least three quotes. An independent insurance agent can help.
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