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The average American homeowner pays over $2,300 per year for homeowners insurance — and rates have jumped 20-30% since 2023 in many states. With premiums climbing, knowing how to reduce your costs without sacrificing coverage is more important than ever. The good news? There are proven strategies that can save you 15% to 40% on your annual premium without leaving your home underinsured.
In this guide, we’ll walk you through 15 ways to save on homeowners insurance — from quick wins you can implement today to longer-term strategies that pay dividends for years.
Understanding Your Homeowners Insurance Premium
Before diving into savings strategies, it helps to understand what drives your premium. Insurance companies evaluate risk factors including:
- Home characteristics: Age, construction materials, square footage, roof condition
- Location: Proximity to fire stations, flood zones, severe weather risk, crime rates
- Coverage amounts: Dwelling coverage, personal property, liability, additional riders
- Your profile: Claims history, credit-based insurance score, deductible amount
- Risk factors: Swimming pool, trampoline, dog breed, wood-burning stove
Each of these factors is a lever you can potentially adjust to lower your premium.
15 Ways to Save on Homeowners Insurance
1. Shop Around and Compare Quotes Annually
This is the single most effective way to save. Insurance rates vary dramatically between carriers — the same home can be quoted at $1,800 by one insurer and $3,200 by another. Yet most homeowners never shop their policy after the initial purchase.
How to do it:
- Get quotes from at least 5 carriers every 2-3 years (or annually if rates increase)
- Use both independent agents (who represent multiple carriers) and direct carriers (like GEICO, USAA, State Farm)
- Compare identical coverage levels — don’t just compare premiums on different coverage amounts
- Check customer satisfaction ratings and claims-handling reviews, not just price
Expected savings: 10-30% by switching carriers.
2. Raise Your Deductible
Your deductible is the amount you pay out of pocket before insurance kicks in. Most policies default to $500 or $1,000, but raising your deductible can significantly lower your premium:
| Deductible | Typical Annual Premium | Savings vs. $500 Deductible |
|---|---|---|
| $500 | $2,400 | — |
| $1,000 | $2,160 | 10% |
| $2,500 | $1,920 | 20% |
| $5,000 | $1,680 | 30% |
Pro Tip: Only raise your deductible to an amount you can comfortably cover from your emergency fund. If you can’t afford a $2,500 surprise expense, don’t set your deductible at $2,500.
3. Bundle Your Policies
Most insurers offer multi-policy discounts when you combine homeowners insurance with auto, umbrella, or other policies. Bundling typically saves 5-25% on each policy.
How to maximize bundling:
- Bundle home + auto for the most common discount (15-25%)
- Add umbrella insurance for additional savings and protection
- Ask about bundling with life, boat, or RV insurance
- Compare the bundled price against the best standalone prices for each policy — sometimes separate carriers are still cheaper
4. Improve Your Home Security
Security features reduce the risk of burglary and damage, earning you discounts:
- Monitored alarm system: 5-20% discount
- Smoke and fire alarms: 2-5% discount
- Deadbolt locks: 2-5% discount
- Smart home security cameras: 2-10% discount
- Water leak detection sensors: 3-10% discount
- Smart home integration (Ring, Nest, etc.): Some insurers offer specific smart home discounts
Expected savings: 5-20% for a comprehensive security system.
5. Upgrade Your Roof
Your roof is the #1 factor in your insurance premium because it’s your home’s primary defense against weather damage. An aging roof can increase your premium by 20-40%, while a new, impact-resistant roof can earn substantial discounts.
- Impact-resistant shingles (Class 4): 10-28% discount in hail-prone states
- Metal roofing: 5-15% discount (fire and wind resistance)
- Roof age under 10 years: Generally qualifies for best rates
- Roof age over 20 years: Many insurers add surcharges or require inspection
Pro Tip: When replacing your roof, ask your insurer which materials qualify for the biggest discount before choosing. The discount could offset a significant portion of the upgrade cost.
6. Improve Your Credit Score
In most states, insurers use a credit-based insurance score to set your premium. Studies show a strong correlation between credit history and insurance claims. Improving your credit can lower your homeowners premium by 10-30%.
Key credit improvement strategies include raising your credit score, paying bills on time, and reducing your credit utilization ratio.
7. Maintain a Claims-Free Record
Filing small claims — say, for a $1,500 repair when your deductible is $1,000 — can increase your premium for 3-5 years by far more than the $500 payout. Many insurers offer claims-free discounts of 10-20%.
Rule of thumb: Only file a claim if the damage significantly exceeds your deductible (at least 2-3x your deductible amount). Pay for minor repairs out of pocket to maintain your claims-free discount.
8. Ask About All Available Discounts
Insurers offer numerous discounts that aren’t always automatically applied. Ask about:
- Loyalty discount: 3-10% for staying with the same carrier for 3-5+ years
- New home discount: 5-15% for newly built homes
- Retirement/age 55+ discount: 5-10% (retirees are home more, reducing theft risk)
- Non-smoker discount: 5-15% (lower fire risk)
- Paperless/autopay discount: 3-8%
- Professional/alumni association discount: Some insurers offer group rates
- Gated community discount: 5-10%
- Paid-in-full discount: 3-8% for paying the annual premium upfront
9. Eliminate Unnecessary Coverage and Riders
Review your policy annually for coverage you may no longer need:
- Scheduled personal property riders for items you no longer own (jewelry, art, electronics)
- Excessive dwelling coverage — insure for the rebuild cost, not the market value (which includes land value)
- Duplicate coverage — if you have a warranty or service plan that covers certain appliances, you may not need policy riders for them
- Unused rider for home business if you’re no longer working from home
Warning: Don’t cut essential coverage to save money. Eliminating liability coverage or reducing dwelling coverage below replacement cost can be financially devastating if you have a major claim.
10. Fortify Your Home Against Natural Disasters
In disaster-prone areas, resilience upgrades can earn significant discounts:
- Hurricane straps/clips: 5-15% in coastal states
- Storm shutters: 5-10% in hurricane zones
- Reinforced garage doors: 3-8% in wind-prone areas
- Fire-resistant landscaping: 3-5% in wildfire zones
- Sump pump with battery backup: 3-10% in flood-adjacent areas
- Foundation bolting: 3-5% in earthquake zones
11. Update Your Home’s Electrical, Plumbing, and HVAC
Outdated systems increase fire, water damage, and liability risk. Updating these systems can lower your premium:
- Replacing knob-and-tube or aluminum wiring with modern copper wiring
- Upgrading from galvanized steel to copper or PEX plumbing
- Replacing an oil furnace with a modern HVAC system
- Adding whole-house surge protection
These upgrades also increase your home’s value and reduce the risk of catastrophic system failures.
12. Consider a Higher-Deductible Wind/Hail Endorsement
In states prone to wind and hail damage (Texas, Oklahoma, Colorado, Florida), a separate wind/hail deductible — typically 1-5% of your dwelling coverage — can dramatically lower your annual premium. A homeowner with $400,000 in dwelling coverage might accept a 2% wind/hail deductible ($8,000) in exchange for saving $400-$800 per year on premiums.
13. Remove Risk Factors
Some home features that increase premiums are removable:
- Trampolines: Removing saves $50-$200/year (or prevents denial of coverage)
- Above-ground pools: Removing saves $50-$100/year
- Wood-burning stoves: Converting to electric or gas can save $50-$150/year
- Certain dog breeds: Some insurers surcharge for specific breeds; verify your dog’s impact on your premium
14. Pay Attention to Your Home’s CLUE Report
The Comprehensive Loss Underwriting Exchange (CLUE) report tracks your home’s claims history for seven years — including claims filed by previous owners. Before buying a home, request the CLUE report to check for prior claims that could affect your insurance costs.
15. Switch to a Local or Regional Carrier
National carriers are well-known, but regional and local insurers often offer lower rates because they have better local risk data and lower marketing costs. Ask an independent agent about regional options in your area.
How Much Homeowners Insurance Do You Actually Need?
Before cutting coverage to save money, make sure you understand what you need:
Dwelling Coverage
This should cover the cost to rebuild your home — not its market value. Rebuilding costs and real estate prices are different numbers. Get a replacement cost estimate from your insurer or a local contractor. Insuring for less than 80% of replacement cost can trigger a “coinsurance penalty,” where your insurer only pays a proportional share of claims.
Personal Property Coverage
Standard policies cover personal belongings at 50-70% of your dwelling coverage amount. Do a home inventory — if your total belongings exceed your coverage, increase it. High-value items like jewelry, art, or collectibles may need a separate scheduled rider.
Liability Coverage
Minimum $300,000, but $500,000 is better. If your assets exceed your liability limit, consider adding an umbrella insurance policy for additional protection at minimal cost.
Additional Living Expenses (ALE)
This covers hotel stays, restaurant meals, and other costs if your home is uninhabitable after a covered event. Standard policies typically provide ALE at 20% of dwelling coverage for up to 12 months. Make sure this is adequate for your area’s cost of living.
When to Review Your Homeowners Insurance
Don’t just set your policy and forget it. Review your coverage when:
- Your premium increases at renewal time
- You complete home improvements or renovations
- You pay off your mortgage (lender requirements may have dictated coverage)
- Your children move out (may reduce liability needs)
- You acquire or sell valuable personal property
- Local building costs change significantly
- You install security or resilience upgrades
What NOT to Cut to Save Money
Some “savings” strategies actually leave you dangerously exposed:
- Don’t reduce dwelling coverage below replacement cost. If your home costs $350,000 to rebuild, don’t insure it for $250,000 to save $200/year.
- Don’t eliminate liability coverage. A single lawsuit can cost hundreds of thousands of dollars. Keep at least $300,000 in liability.
- Don’t skip flood insurance. Homeowners policies don’t cover flood damage. If you’re anywhere near a flood zone, get a separate flood policy.
- Don’t cancel during the policy period. Gaps in homeowners insurance coverage can make you uninsurable or dramatically increase future rates.
Frequently Asked Questions
How much can I realistically save on homeowners insurance?
By implementing several strategies from this guide — shopping around, raising your deductible, bundling, and improving your credit score — most homeowners can save 20-40% on their annual premium. On a $2,400 average premium, that’s $480 to $960 per year.
Does my credit score really affect my homeowners insurance?
In most states, yes. Insurers use a credit-based insurance score (different from your regular credit score, but based on similar data) to price policies. Poor credit can increase your premium by 50-100% compared to excellent credit. A few states (California, Massachusetts, Maryland) prohibit this practice.
Should I file small claims or pay out of pocket?
Generally, pay out of pocket for claims under 2-3x your deductible. Filing a small claim can increase your premium for 3-5 years and eliminate your claims-free discount. For example, filing a $2,000 claim on a $1,000 deductible nets you only $1,000 but could cost you $300-$500/year in higher premiums for the next several years.
How often should I shop for homeowners insurance?
Compare quotes every 2-3 years, or immediately if your premium increases by more than 10% at renewal. Also shop after making significant home improvements that could qualify for discounts with other carriers.
Does my home’s age affect my premium?
Yes. Older homes typically have higher premiums due to outdated electrical, plumbing, and roofing. However, updating these systems and maintaining your home well can offset the age factor. Some insurers also offer historic home discounts for well-maintained older properties.
Is it worth paying for a home security system to get insurance discounts?
Usually yes. A basic monitored security system costs $20-$50 per month but can save you 5-20% on your homeowners premium — potentially $200-$400 per year. Plus, you get the actual security benefits. Just make sure to inform your insurer after installation.
The Bottom Line
Saving on homeowners insurance doesn’t require cutting corners on coverage. By shopping strategically, raising your deductible to an appropriate level, bundling policies, improving your home’s security and resilience, and maintaining good credit, you can potentially save hundreds of dollars per year while keeping your home fully protected.
Start with the biggest impact items — shopping around and raising your deductible — then work through the other strategies in this guide. For more ways to reduce your monthly expenses, check out our guides on negotiating lower bills and budgeting with the 50/30/20 rule.