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How to Save Money on Homeowners Insurance

Written by Nickel - 11 Comments

I’ve written in the past about how to save money on health insurance, life insurance, and car insurance. Today I’m going to round things out with an article on homeowners insurance. What follows is a list of eight tips for reducing your premiums and saving a ton of money.

Focus on your rebuilding costs

While you need to insure your home and its contents against destruction, there’s usually no need to insure the land that it’s built on. Thus, it’s important to think of your actual rebuilding costs (as well as the cost to replace your stuff) when buying a policy. If you don’t, you might end up over-insuring and paying too much.

Increase your deductible

As with other types of insurance, if you’re willing to bear a greater portion of the risk, you can save a significant amount of money. Simply call your agent and ask them to increase your deductible. Just be sure that your emergency fund is large enough to cover your out-of-pocket expenses in the event of a disaster.

Upgrade your security

Things like deadbolt locks, burglar alarms, fire extinguishers, and smoke detectors can earn you a discount. In some cases, these discounts can offset most (if not all) of the additional costs, so it’s well worth checking with your insurer for details.

Bundle multiple policy types together

We get a nice “multi-line” discount for carrying multiple policies with a single company. We actually have two car policies, our homeowners policy, a personal articles policy (for my wife’s engagement and wedding rings) and an umbrella policy all with the same company.

Location, location, location

This one is tough to implement if you already own your home, but… Proximity to fire hydrants, fire stations, etc. can influence your premiums. Not surprisingly, closer is better. No, it doesn’t make sense to move to reduce your premiums, but it might be worth keeping in mind when buying a new home.

Keep your credit report clean

I’ve talked about this one previously… Like it or not, your credit report can influence your insurance rates. Indeed, insurance companies consider clean credit to be an indicator of reduced risk. Thus, it’s important that you check your credit report regularly, and fix any errors that you find.

Ask about other discounts

You can often get a group discount (e.g., alumni association, senior discount, etc.) just for the asking. Give your agent a call today and find out if there are any discounts they can apply to reduce your premiums. If you don’t currently qualify, perhaps there is a group that you can join to get an additional discount.

Shop around

Assuming that you’re doing everything else right, another great way to save money on homeowners insurance is to comparison shop. You can either call around to local agents, or check a homeowners insurance comparison tool. Whatever you do, be sure to buy from a reputable company so you won’t run into any problems if/when you file a claim.

So there you have it… Eight simple tips for saving money on homeowners insurances. If you have any further suggestions, please be sure to share them in the comments.

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Published on August 31st, 2009
Modified on February 24th, 2010 - 11 Comments
Filed under: Insurance

About the author: is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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11 Responses to “How to Save Money on Homeowners Insurance”

  1. 1
    financia Says:

    Some good advice here!

    I added a security system to our home last year and the insurance savings is the same as the monthly alarm service charge.

    So we are breaking even and adding some extra peace of mind – not a bad deal if you ask me!

  2. 2
    Niche Topics Says:

    Great tips, thanks!Here’s one to the list — Quit smoking. A smoking household pay more since there’s an increased risk for a potential household fire.

  3. 3
    Insurance Article Says:

    I’ve noticed some nice discounts come out of haing a security system. The more advanced the system the better the discount for example one that contacts a monitoring company will reduce the rates more than one that doesn’t.

  4. 4
    Alex@HomeownersInsurance.net Says:

    This was a great review of the common things homeowners can do to get cheaper rates on their home insurance. The only thing I’d like to add is that there are HO-3 and HO-5 policies. Generally the HO-5 insurance policies are much more comprehensive with their coverage. Some companies that offer HO-5 policies even go so far as to insure replacing the contents of your refrigerator! The HO-3 policy is basic and often considered a “fire” only policy. If you want a luxury home insurance provider, you’ll pay even more than you would with a normal HO-5.

  5. 5
    David Says:

    Should you have a claim, you can save huge hassles and much time if you also prepared a comprehensive home inventory. You can do it yourself with a camera and a careful rundown of information about the major items–such as serial numbers, brand and model numbers. Once you have a loss, it’s hard to remember everything to include in a claim. You may be able to have a copy of this inventory put in the file with your insurance agent, but for sure keep a copy off site somewhere–a safe deposit box or even the home of a friend or relative would work. That way, in the case of a disaster, the inventory is more likely to survive it.

  6. 6
    andy Says:

    I found that calling competitors for quotes and then taking these (hopefully lower) quotes back to your current providers is a good way to get a lower premium.

  7. 7
    jason stant Says:

    i tried this company ratekick’s website to compare insurance and what con artists…your going to show me fake rates based off of perfect credit scores and not based on mvr at all? what are these people thinking..anyone else have this terrible experience?

  8. 8
    Shobir | Find Some Money Says:

    Focusing on rebuilding costs as opposed to the real value of properties is a great way to lower your insurance premiums. I was paying 30% more until I readjusted the insurance. Thanks for sharing these ideas.

  9. 9
    Nick | Millionaires Giving Money Says:

    Upgrading your security is definitely worth the trouble as insurance premiums can halve. I put in a state of the art security system which was on discount and my insurance premium fell significantly, the system is guaranteed to 25 years and should pay for itself from the savings I’m making by paying less insurance in 2 years. That’s a great deal.

  10. 10
    Imran | Xomba Says:

    I always shop around to find the best deal, I find loyalty never pays. I also use cash back sites to maximize my discounts, I know people who have taken full advantage of lowering premiums and using cashback to insure their homes for free. Great article, thanks for sharing.

  11. 11
    Dede Says:

    I own my home outright and have no desire to rebuild should the home be destroyed. Are there homeowner policies that will merely ‘total’ the home and pay you off?

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