Ways to Save Money on Your Homeowners Insurance Policy

The cost of homeowners insurance varies a lot depending on where you live and what you own, but there are ways to save money. On average, homeowners paid $2,230 annually in 2024, but some estimates put the average annual premium estimate as high as $5,000 or more.[12]

Choose a higher deductible plan, bundle your home and auto insurance, and reduce risky assets to save money on your homeowners insurance policy. Many insurance providers offer discounts, such as a loyalty discount. A higher credit score can also translate to lower premiums on your policy.

There are many avenues you can take to save money on your homeowners insurance policy. Here are some of the top options.

1. Compare & Shop Around for Other Home Insurance Policies

When shopping for homeowners insurance, it’s important to check the options available to you. Look at multiple companies and a variety of the policies offered by them. Consider the cost of these policies, their features, and what you need. While it’s important not to settle for an inadequate policy just to keep costs low, there’s also no reason to overspend if you can find a cheaper policy that has the features you’re looking for. 

For reference, the average homeowner spends $2,230 per year on homeowners insurance for an HO-3 policy, which is usually the standard type of coverage available for an average homeowner. The most expensive states to get insurance in are Oklahoma, Florida, and Nebraska, while the cheapest insurance is available in West Virginia, Vermont, and Delaware.[13]

The average in your area may differ, and it will fluctuate over time. But you should be aware of what other people are paying, as this can motivate you to make changes if you’re paying more than is typical.

2. Improve the Safety of Your Home

Making improvements that make your home safer can help lower your insurance premium. This makes logical sense. Changes that make your home less of a liability to insurers mean that they will be more willing to offer you better deals. 

Examples of home safety improvements that can lower your insurance premiums include the following: 

• Installing carbon monoxide detectors 
• Adding a motion-activated home security system
• Putting in a fire sprinkler system
• Replacing locks
• Repairing and maintaining your roof 

To use a real-world example, AAA Insurance policyholders in California can get a 5% discount for having residential sprinklers in a condo. There’s another 5% discount available for a centrally monitored burglar alarm. 

It’s worth researching which companies offer these kinds of discounts, especially if your home already has certain features that make it more secure. Some homeowners are surprised to learn they could have been benefiting from discounts all along — they simply were unaware.

3. Consider Raising Your Deductible

A fairly direct way to often save on insurance is to get a policy with a higher deductible. This will typically lower your premium, meaning you will pay less over time. The tradeoff is that if you need to use your insurance, your deductible is now higher. As a result, you’ll need to pay for damages out of pocket until you meet your policy’s threshold. 

This method of saving on insurance carries risk. If your deductible is too high and you only occasionally use your insurance, your policy may not benefit you. The math of what a good deductible looks like will depend on the specifics of your situation. While you could save 10% to 15% on monthly premiums, that savings could be largely offset if you need to make multiple claims where you must pay large amounts out of pocket before you hit your higher deductible.[6]

4. Bundle Your Auto & Home Insurance Policies

Many insurance companies offer bundles, where you can bundle your home and auto insurance together for a lower monthly premium on each. While this admittedly can increase the complexity of shopping, as you now must consider the total cost of both your home and auto insurance together, these deals have the potential to result in big savings, sometimes up to 25%.

It’s worth asking your insurer if they offer these bundles and looking at similar offers from companies operating in your area. Just keep in mind that a lower premium on your homeowners insurance is only valuable if you’re still getting a good deal on auto insurance. It’s the total cost of both that matters when considering these deals, not just the cost of one or the other.

5. Ask Your Current Provider About Available Discounts

Insurance companies often have discounts and similar promotional deals available to both existing and new customers. Many also have loyalty rewards, where a customer who has a policy with them for a certain period of time may receive some sort of benefit. 

Some common discounts offered by insurance companies include the following:

• Safety discounts
• Loyalty discounts
• Up-front payment discounts
• Military or veteran discounts
• Senior or retiree discounts
• Organization or employment discounts (such as for educators)

Most often, these discounts are in the 5% to 8% range. 

6. Get Rid of Risky, Unused Assets

Insurance companies consider some assets risks, and their presence can increase the cost of your homeowners insurance. Items like pools and trampolines will often contribute to higher premiums.[4] If they’re going unused, getting rid of them can potentially help to lower your monthly premium. 

These are common examples of assets insurance companies consider risky:

• Trampolines
• Pools
• Treehouses
• Antiques
• Collectibles
• Expensive equipment
• Fine art

7. Improve Your Credit Score

Your credit score has the potential to affect your home insurance costs. Many insurance companies use credit to predict how risky a policyholder might be. They will often raise the premiums of policies for those holders. 

Common ways to maintain good credit and improve bad credit include the following:[5]

• Pay off credit card debt before your statement closes.
• Avoid credit card purchases you can’t afford to pay off within the month.
• Pay off loans early or on time.
• Regularly review your credit reports for irregularities and dispute any inaccurate or outdated information.
• Limit your requests for new credit.
• Use 30% or less of your available credit.

8. Avoid Making Small Claims

Technically speaking, homeowners insurance will often cover minor damage to your home, but it’s usually best to avoid making small claims on your policy. Small claims are often not worth it because the amount may not even meet the deductible.

First, insurers often offer discounts for customers who go “claim-free” for an extended period of time. Missing a deal like this doesn’t make sense if a claim is for a small amount of money. In many cases, a small claim won’t offset the potential savings from a claim-free deal. 

In addition, insurers will raise your rate if they see a history of you making many claims. This comes back to your risk as a customer. The more expensive an insurer expects you to be, the more expensive they will make your policy in an attempt to recoup some of their potential losses.

Frequently Asked Questions About Saving Money on Your Homeowners Insurance Policy

Below, we’ve answered some of the most frequently asked questions about saving money on homeowners insurance.