NextAdvisor is not a licensed insurance company, agency or broker and we do not sell, solicit or negotiate insurance. Our content provides summaries of insurance providers and/or products that may not include all terms, benefits or limitations of such provider or product. Please consult a licensed insurer or producer regarding any insurance product. Our site may include links that take you to another website and result in us earning a fee. However, our compensation is never tied to whether you purchase an insurance product. For more information, please see our Advertising Disclosure and How We Make Money.
Keeping up with home insurance payments is costly.
Average home insurance premiums rose to $1,249 per year in 2018, up more than 3% from the year before, according to the latest data from the National Association of Insurance Commissioners.
But with a little time and know-how, you could cut your home insurance premiums with discounts and credits. In some cases, these discounts can net you as much as 20% off regular premiums.
Homeowners Insurance Discount and Credits
Providers use a wide range of factors to determine how big or small of a risk you and your home are to insure, and you can use these factors to your advantage through insurance discounts and credits.
For example, you’re likely to pay less on premiums if your home was built in the last few years or if you recently remodeled.
“When everything is new, the risk of being damaged is less. Thus, the need for insurance claims is smaller,” says Nick Schrader, insurance agent at Texas General Insurance, an insurance company.
On the other hand, if your house has a decades-old roof or you’re in a remote region, you might pay more.
Insurance providers like insuring low-risk homeowners, and if you can qualify for some of the factors that make you low-risk, insurers will reduce the cost you pay for insurance.
Who Is Eligible for Insurance Discounts?
Every insurance provider offers discounts. The discounts you’ll be able to take advantage of depends on who insures your home.
“Don’t be surprised when one company provides a discount for something that another does not. Each insurance provider will target a unique segment of the market that they feel is best suited to their product and then cater discounts to that segment,” says Ted Olsen, managing director at Goosehead Insurance, an insurance agency.
Go with the provider who offers a policy that truly fits your needs as a homeowner, not just the one with the best discounts.
If you already have a provider, it’s always smart to call and ask what discounts they offer.
Here’s a quick list of a few of common discounts and credits for home insurance:
- Newly built home
- Bundling multiple types of insurance
- Installing monitored burglar or fire alarms
- Using the provider for multiple years (loyalty discount)
- Few or no claims
- Home improvements (reinforced roof, storm windows, etc.)
- Employment (military, first responders, government, etc.)
Some insurers are also starting to offer discounts for homes that meet green certifications like Energy Star and LEED.
Occupation-based discounts are common in the insurance industry. If you’re an active-duty member of the armed forces, a veteran, or if your spouse has served, then you may qualify for a military discount on your policy.
There are also insurance companies specifically designed for the needs of members of the U.S. Military. USAA is one of the nation’s top-rated insurance companies, and USAA insurance is only available to people who have served and their families.
Discounts for Seniors
Once you’re retired and at least 55 years old, you might be eligible for lower home insurance premiums. Some companies discount premiums up to 10% for these homeowners.
This is because people who retire tend to stay at home more, which means burglaries are less likely. Retired homeowners may spot fires or burst water pipes faster, too. So providers view retirees as lower-risk to insure.
If you’re an AARP member, you can access affordable home insurance policies from The Hartford, a well-known provider who caters their insurance products to people who are 50 years or older.
Many providers reduce the cost of policies when people purchase multiple types of insurance. If you use one provider for your home and car insurance, you could get a better deal on both policies. Other policies people might bundle include renters, life, and boat insurance.
However, it’s important to shop around and research the costs of policies from different providers before making a choice. A provider may not be the best fit even if they offer discounts.
“The number of discounts is less important than the overall value (coverage and price) of the policy. Many people will turn a blind eye to a policy with fewer available discounts that is a better fit for them simply because another insurance provider offers more discounts but at a lesser value,” says Olsen.
To ensure that you take advantage of all the discounts and credits available, try to re-examine your policy every year. Taking a few minutes to look up discounts could save hundreds of dollars in premiums. But whenever the time comes to go over your policy, keep your eyes on the prize.
There are also other ways to lower your premiums. Setting higher deductibles in your policy can cut down the cost of coverage significantly.
“Typically, if you can afford a higher deductible, you should do it. It will significantly lower the cost of your home insurance, and also make you really think before you make a claim that could adversely affect your rates for 3-5 years,” says Duncan French, a State Farm insurance agent.
A good home insurance policy provides reliable protection for your home and possessions at a reasonable rate. Although discounts can be enticing, the coverage you receive in your policy is always the first concern.