5 Ways to Reduce Your Homeowners Insurance Costs


Homeowners insurance can seem like an unnecessary expense. After all, how likely is it that you’ll have to rebuild your home in the event of a disaster? The truth is, natural disasters and other unfortunate events happen every year, and it’s in your best interest to be prepared by minimizing the financial impact should they occur in your home. If you own a home, it’s likely that you have some type of insurance to protect it in case of fire, vandalism or another unfortunate circumstance. Homeowners insurance covers the cost of repairing or rebuilding your house if it is damaged by something like fire or lightning. However, these policies can get expensive fast. Depending on where you live and how much coverage you opt for, homeowners insurance premiums can creep up past $1,000 per year. Here are 5 ways to reduce your homeowners insurance costs:

Ask for a Discount

If you’ve been with the same insurance company for several years, it may be worth asking if they offer discounted rates for long-term customers. Some companies charge significantly more for new customers for one reason or another, so even if you have to switch to a different company, it may be worth the cost to lock in a lower rate for the long term. Alternatively, if you haven’t switched companies in a long time, you may be able to negotiate a better rate on your current homeowners insurance policy. When it comes time to renew your homeowner’s policy, ask your agent if they can lower your rates. You may be pleasantly surprised.

Shop Around

When you renew your homeowners insurance, you may be tempted to stick with the same company. However, you should shop around each year to make sure you’re getting the best deal possible. You may be able to switch to a new company, lower your premiums and not affect your coverage. Depending on where you live and the potential risk of damage to your home, you may be able to reduce your premiums by as much as 25% simply by shopping around. If you can’t find a company that will give you a lower rate, you may want to consider raising your deductible.

Increase your deductible

A deductible is the amount of money you have to pay out of pocket for a claim before your insurance kicks in. The higher your deductible, the lower your premium will be. For example, if you have a $500 deductible and your home sustains $5,000 in damage due to a fire, you’ll have to pay the first $500 before your insurance company pays the remaining $4,500. Depending on the type of coverage you have, you may want to increase your deductible to $1,000 or $2,000. You’ll want to be careful with this one because you’ll want to make sure you have enough money saved to cover a potential claim. If you don’t, you could be forced to walk away from your home if a fire or other disaster strikes.

Add Loss-Protection Features

Loss-protection features are additional services that can be added to your home insurance policy. Because these additions come at no extra cost, there’s no reason not to take advantage of them. Depending on where you live, certain features may cost extra, like flood insurance. However, things like fire sprinklers, termites and earthquake insurance are offered at no additional cost from most insurance companies. If you own a home in a high-risk area, you may want to consider adding flood insurance. This can be incredibly useful in the event of a large storm or hurricane, as well as smaller floods that occur during normal weather patterns.

Get an Electronic Tracking Device

While not a “feature” per se, an electronic tracking device can help you save on your homeowners insurance costs. If your home suffers damage, your insurance company will look at the surrounding area to determine what caused your home to be damaged. If your home was damaged by a flood, for example, your insurance company may decide not to cover the damage. However, if you have a device that can track localized flooding, you can prove that your flood was caused by an isolated event and is not a sign of a larger problem in your area. This can be a big help when it comes time to make a claim.


Homeowners insurance can seem like an unnecessary expense. However, it is important to be prepared in the event of a disaster. If you want to reduce your homeowners insurance costs, ask for a discount, shop around, increase your deductible, add loss-protection features and get an electronic tracking device.

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