How to Save Big Money on Your Home Insurance Premium

In the unfortunate case of a robbery or some unforeseen disaster, you’ll be grateful to have home insurance. But often it feels like a heavy burden on your budget — a chunk of money you pay every month even though you rarely have to use it. Still, it would be foolish to cancel your insurance just because it’s expensive, particularly when there are easy ways to save on home insurance premiums.

Raise Your Deductible

It may sound counterintuitive, but you can actually save significantly on your premium by increasing your deductible.

The deductible is the amount of money you have to pay out-of-pocket before your insurer starts covering the costs. But if you aren’t making frequent use of your insurance, it might be smart to increase your deductible.

According to the Insurance Information Institute, most companies will recommend a $500 deductible. But, they argue, if you raise your deductible to $1,000, you could end up saving 25% or more on the bottom-line of your bill. Just be sure to save enough in the event that you do have to foot a large, out-of-pocket deductible.

Rev-up Your Home Security

You don’t have to go all-out with a professional surveillance service to start saving on insurance. In fact, Mark Friedlander of the Insurance Information Institute says you can save up to 5% on your premium by properly installing a smoke detector, burglar alarm or deadbolt locks. Furthermore, you could save as much as 15%-20% if you splurge on a comprehensive sprinkler system or an actively-monitored fire/burglar alarm.

Lean Into the Claim-free Discount

Many home insurance companies will reward you for going a certain amount of time without a single claim. The best way to access such discounts is by covering the costs of minor problems with your own money.

Doesn’t that defeat the point of having home insurance, you might ask? Not entirely. If a repair is around the same price as your deductible (especially if you increased your deductible as suggested above), then take care of it and let your broker think you’re a good, hassle-free client worthy of a discount. That way, if you suffer major damage, you’ll be glad you have that coverage.

Consider Lesser-known Discounts

Home insurance companies offer more discounts than they’ll tell you upfront. Don’t hesitate to ask about savings. You could save money if you:

  • Don’t smoke or have any smokers in your house;
  • Recently bought your home;
  • Use paperless billing, and/or use automatic bank payments;
  • Are a teacher, engineer, firefighter or work in other specific fields.

Bundle Home and Auto Insurance

You can add significant savings by bundling both home and car insurance from the same company. And most major insurers offer attractive bundles. Indeed, the Insurance Information Institute reports that you could save between 5% and 15% on both home and car coverage by bundling the payments.

Consider Geico, Farmers, or State Farm for the best home/car bundles.

How to Save on Home Insurance Premiums — Sources

Insurance Information Institute
NerdWallet