Home Insurance Costs

Top 10 Ways to Reduce Your Home Insurance Costs

10 Ways to Reduce Your Home Insurance Costs

Over the past several years, home insurance costs have been skyrocketing everywhere, forcing people to keep their eyes peeled for ways to keep their homeowner’s insurance at bay.

According to data gathered from several reports issued by the National Association of Insurance Commissioners, the average home insurance premium in 2017 was around $1,211; a huge leap from 2008’s average premium of around $830. Moreover, the expense keeps rising.

In this article, we shed light on some of the most notable factors that influence the calculation of home insurance costs, as well as ten surefire ways to help you reduce your own home insurance costs. 


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What Makes Home Insurance Expensive?

Why do home insurance premiums increase? Unfortunately, it’s hard to say. Homeowner’s insurance costs are influenced by a host of factors, making it challenging to pinpoint the exact reason why an individual’s home insurance costs are on the rise.

It’s also worth noting that insurers employ different formulas for cost calculation, and so your home insurance costs may vary slightly from one insurer to another. Factors that affect homeowner’s insurance are divided into two categories: home-related factors and location-related factors.

Home-related factors include the property’s age, quality of construction, roof condition, and the presence of special features such as swimming pools, hot tubs, and the likes. In contrast, location-related factors include climate-related risks, crime risk, and fire risk.

Other factors taken into consideration include the homeowner’s credit and deductibles. The latter refers to other types of insurance that the homeowner may be subscribed to. 

10 Ways to Reduce Your Home Insurance Costs

1. Improve Your Home’s Security

Did you know that most burglars check to see if there’s a security system before attempting to break into the house? So having a security system installed reduces the chances of your house getting robbed, guaranteeing you an insurance discount.

The more advanced and feature-packed your home security system is, the higher the insurance discount. We recommend investing in a security system composed of surveillance cameras, fire alerts, and carbon monoxide alerts. 

2. Make Sure You Don’t Over Insure

By over-insuring, we’re talking about having your insurance company cover small claims when you can simply pay them out of pocket. 

No matter how small, a single claim can result in your premiums undergoing a surcharge that can last for up to five years, and you definitely don’t want that. So, instead of reporting more minor property claims, consider the possibility that it may be more cost-effective to pay out of pocket.

3. Stay with the Same Insurer – Build up No Claims and Rewards

Sticking to the same insurance company for a long period of time can help reduce your home insurance costs by 5% – 10% in your monthly household budget

Many insurance companies offer their long-term policyholders of 3 to 5 years a 5% discount on their premiums and a 10% discount for policyholders of 6 years or more.

4. Install a Safe – Expensive Items Aren’t Usually Covered

If you keep jewelry or other expensive items in your house, we recommend installing a safe, as insurance companies don’t typically cover expensive belongings.

5. Limit the Amount Time Your Property Is Left Continuously Unoccupied

The cost of insuring a house that’s left continuously unoccupied is bound to be higher than that of a house with someone regularly coming and going. 

Why? Because if a situation arises in an empty house, there won’t be anyone to tend to it, which puts the house and your belongings at a much greater risk. 

6. Review Your Policy and the Value of Your Possessions at Least Once a Year

To ensure that you’re not paying more than you should on homeowner’s insurance, it’s crucial to keep tabs on your policy at least once a year.

If your policy is no longer trending, it might be time for you to opt for a better policy. We strongly recommend getting a second opinion from a different insurance agent than the one you always resort to before pursuing a new policy to ensure making a well-informed decision.  

7. Maintain Your Home to Prevent Having to Make Claims

To reduce your chances of making claims, you have to look after and maintain your home. Don’t wait for a situation to go south to address it. If there’s anything in your house that requires fixing, fix it today. 

Bottom line: if there’s anything in your house that might force you to make an insurance claim in the future, tend to it now! 

If a claim is necessary, read about property claims vs. loss assessors to determine which you need to acquire your settlement. 

8. Be Realistic About the Coverage You Need – Don’t Take Out Extras You Don’t Need

There are always extras with home insurance policies, from accidental damage coverage and legal expenses coverage to away from home coverage and home emergency coverage.

Opting for too many extras will add to your premium, so just opt for what you need and disregard the rest. Be realistic about the coverage you need or don’t need.

9. Make Your Home More Disaster-Proof

Protecting your home from natural disasters cuts your home insurance costs. There are many steps you can take to make your home more disaster-proof, from adding storm shutters to reinforcing your roof. 

10. Pay Annually Instead of Monthly 

Paying your premium annually will guarantee you a lower rate than the one you get when you pay monthly. 

This will help maximize your savings and spare you from worrying about home insurance until it’s time to renew your policy. 

Final Thoughts on Top 10 Ways to Reduce Your Home Insurance Costs

There are several ways to reduce your insurance costs, most being suitable for the majority of homeowners. 

Before taking any step toward reducing your home insurance costs, we strongly recommend referring to your insurance agent and doing some research, as they’ll know the exact type of coverage your house needs. Your agent may also point out discount possibilities that you may not have been aware of. You should also comparison shop, which is often a way to reduce your home insurance costs. It is always good to add checking and reviewing your home insurance costs in your end of the year financial checklist.

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Simon Colburn
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Simon Colburn is the company director of Property Claim Assist and has been in the insurance industry for the majority of his working life – so it’s an area he knows extremely well. He began his career as a claims clerk at South Essex Insurance Brokers. A few years later he took a senior property claims role at Commercial Union Assurance. After periods at Equity Insurance Association and Red Star Policies at Lloyds, he moved to The City of London, where he spent eight years as a claims manager for The Black Sea & Baltic General Insurance Company. Simon is a member of the Chartered Insurance Institute, the Chartered Institute of Loss Adjusters and the Society of Claims Professionals.

9 thoughts on “Top 10 Ways to Reduce Your Home Insurance Costs

  1. Well say Dividend Power, newly I buy a home. Now, I am thinking about home insurance. You cleared my confusions for choosing home insurance at cheap rate. Thank You for sharing.

  2. This is truly an awesome blog mentioning the ways of to reduced the home insurance cost. After reading your article, I have applied your strategy and started using surveillance cameras which is really help a lot to make sure the safety of not only my valuable assets but also helps to reduced my home insurance cost as well as gives me an interest discount. Thanks for this excellent article.

  3. I couldn’t agree more. Yes, this is correct. In addition to this, sticking in one insurance broker is also a good way to reduce insurance costs meaning you don’t have to start together with your coverage.

  4. You can save money by bundling multiple insurance policies. When purchasing a homeowners insurance policy, it’s smart to bundle it with another policy. If you have auto insurance and life insurance through the same company, you can save a lot of money by bundling them. Some insurers even offer discounts for multiple policies. This can be a great way to lower your home insurance premium. You can also look into multi-policy discounts.

  5. Reducing home insurance costs is such a crucial aspect of financial planning for homeowners. I completely agree that consulting with an insurance agent is key, as they have the expertise to tailor coverage to our specific needs. Thanks for highlighting these strategies.

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