How to get cheaper homeowner’s insurance than you’re paying now? Use these 9 strategies and tricks to get cheaper home insurance coverage to make owning a home more affordable.
Is homeowner insurance negotiable?
I’ve owned a home (and a homeowner insurance policy) for 10 years now. And let me tell you, I’ve thought of AND tried just about every way under the sun for how to get cheaper homeowner’s insurance.
There was the time that I spotted a mistake on our policy six months in, and shaved off $50/year after calling them out on it. Or the time that I had our home insurance lowered because we had installed a new A/C unit. Or my most recent win, when I finally decided that my insurance rep was giving me the run-around with insurance premium hikes every year, and saved a ridiculous $1,600/year by switching to another company.
Yes, I’ve had many, many conversations with insurance reps.
While I don’t think you can say homeowner’s insurance is “negotiable”, using strategies like the ones I’m about to give you can certainly get you lower rates.
Since homeowner’s insurance premiums can be costly, and going without insurance is almost never a good option, I’ve taken the time to write out 9 strategies for how to get cheaper home insurance.
Because don’t you want to be spending that extra money somewhere else?
Strategy #1: Shop Around (How Often Should You Shop for Home Insurance?)
This strategy, BY FAR, has saved our household more money than any other.
Let me give you some specifics.
When we first purchased our home, we were scrambling to get a homeowner’s insurance policy as fast as we could (you need one before you can close on a home). SO, we went with the one that was suggested to us. The price was an egregious $2,700/year.
After the dust settled and we felt like we could breathe again, we shopped around.
We found a new policy for “just” $1,961/year, and were ecstatic. That was a $739/year savings for us, which was way more affordable!
But then, the price went up every single year. In fact, let’s talk about how often you need to shop around, because I think it’s more often than you think (it sure as heck was more often than I thought!).
Does home insurance go up every year?
In my experience as a 10-year homeowner in Houston, TX…I can confidently say YES to this question. Every single year that we had an insurance policy, the cost went up at renewal time. The only time it didn’t was when we switched companies, and brought the cost back down, considerably.
But you know what? The cost started going up again after just one year with the new company – so shopping around for homeowner’s insurance is just something you have to do every year. Sort of like cleaning out the gutters, or getting a physical.
After 6-7 years of increasing premiums + attempted negotiations with my insurance rep, I finally shopped around for a new company just last year and got a considerable deduction on our costs. They gave us more insurance for our dwelling and contents, at a $1,600 savings/year for us (this reflects both the discounts they gave us for our car insurance AND for our homeowner's insurance. Seriously – I was blown away, myself!). Fantastic!
Psst: fun little fact? If you get a big reduction in your homeowner’s insurance, and you pay into escrow, then you’ll get a nice, fat check in the mail for the overage you’ve pre-paid throughout the last year. We got a check for around $1,600 in the mail after switching. Boy was that a nice surprise!
Compare home insurance quotes using PolicyGenius. They give you multiple quotes from multiple companies, at the same time. And these guys earn a salary, not commission – so they’re all about finding you the best offer. You can even just get an anonymous quote, if you’d like!
Strategy #2: Buy + Shop Around for Homeowner’s Insurance in the Right Season
The time of year you choose to shop around for a homeowner’s policy (or your first one, altogether) directly relates to the cost of that policy.
For example, in Houston, you never want to buy a homeowner’s insurance policy during hurricane season. It’s just going to be higher, period.
Granted, if you have to buy a policy during an undesirable time period, you can always shop around again when the right season comes around (this is what we did, since we purchased a home during hurricane season and had to get a policy to hold us over).
Strategy #3: Give Your Current Company a Chance to Decrease Your Premiums
The very first thing I did each time I saw an increase in my homeowner’s insurance costs was to call my current insurance rep.
I did this for several reasons.
- I like to be loyal for as long as I can (apparently, I gave this person WAY too much loyalty, given how when I finally switched insurance companies our policy was a ridiculous $1,600 LESS than what he had been charging me. Yikes!).
- They want to keep me (insurance reps don’t like to lose business!), and so about 3 times out of 5 they were able to find new discounts. Most of the time, this only worked to lower the increase amount, meaning in the end I was still seeing an increase, just less of an increase. BUT, if you don’t call your insurance rep to ask for new discounts, then they typically aren’t just going to apply them to your account on your behalf.
- The pool of people they insure are constantly changing. So, I’ve been told by another insurance rep to check in every six months or so and see if you can get a decrease based on their latest risk assessments.
Strategy #4: Prevent High Homeowner’s Insurance to Begin With
It’s worth mentioning, in case you’re a first-time home buyer and you’re still looking for a home, that you can prevent expensive homeowner’s insurance by just buying a home that’s cheaper to insure.
For example, if you can avoid buying a home in a flood plain, then I’d do it. There’s the added cost of flood insurance (which, you should probably buy even if you don’t live in a flood plain), but on top of that the cost of homeowner’s insurance will generally be higher.
Certain zip codes and neighborhoods have higher insurance rates, which is why you want to check on things like burglary rates and fire protection ratings for any home you want to purchase. Also, the size of your home will dictate the cost of your homeowner’s insurance policy. After all, the policy is largely based on the amount of home and home systems the insurance company would have to replace in the event of a claim.
Pro Tip: While house hunting, do yourself a favor and get a quick quote on 2-3 homes you’re considering purchasing. That way, you can take the insurance policy cost into consideration before making an offer.
Strategy #5: Improve Your Credit Score
Did you know that part of the quote you get for homeowner’s insurance is based off of your credit score?
As in, having a high credit score (the closer to 850, the better) can get you a lower homeowner’s insurance rate.
About 85% of homeowner insurers look at your credit history and credit report, then give you a Credit-Based Insurance Score (CBIS). So, you want to improve your credit score before locking in an insurance policy.
Pro tip: Check your credit score for FREE using Credit Sesame. Is it higher than it used to be? Call up your insurance rep and ask for a discount.
Strategy #6: Move Your Auto Insurance Over to Your Homeowner Policy
Insurance companies like more business, so they offer discounts for “bundling” insurance policies together. This means you want to ask your insurance agent how much you would save off of your homeowner’s insurance if you give them your auto insurance business.
You’ll want to make sure your overall cost of both auto insurance and homeowner’s COMBINED is less than what you were paying on the two separate policies before switching your auto insurance over.
For example, if you pay $1,400 in homeowner’s insurance/year, and $600/year in auto insurance (so, $2,000/year in total), and your homeowner’s insurance company will give you an auto policy for $650/year but a 10% discount on your homeowner’s policy (bringing that down to $1,390), then your new combined cost would be $2,040. That wouldn’t be a good reason to switch over.
BUT, if they offer you enough of a discount so that you’re then paying less than $2,000/year for both policies combined, OR if that $2,040 amount includes more insurance than you’re currently getting (such as comprehensive coverage for your car, where you currently have liability-only), then you’d want to think about switching.
Strategy #7: Comb Over Your Application for Mistakes
Aflac found that 42% of American workers are paying up to an extra $750/year due to mistakes on their insurance applications and policies.
In fact, I was one of them! Six months into paying on our insurance policy, I was looking it over and saw that our homeowner insurance company had increased our home size by 100 square feet compared to what it actually was!
I was able to prove to them (by providing our home survey) that our home had 100 less square feet, which saved us about $50/year.
Strategy #8: Get Credit for Making Home Improvements
Did you know that if you replace large appliances or make other repairs on your home, that your insurance cost may go down?
We were happy to find out that replacing our A/C and Heater on the downstairs in our home made us eligible for a policy discount that lasted for several years (unfortunately, I cannot remember the numbers on this one – but trust me on it). So, make sure your insurance rep knows when you replace a major appliance or system in your home.
Strategy #9: Increase Your Deductible
An increase in deductible – or, the amount you’ll have to pay out on an insurance claim – will decrease your monthly premium amount. Depending on how high you go with your deductible, you could save yourself between 5% and 15% each month.
Pro Tip: Raise your deductible, then take the savings in monthly premiums and use it to fund a savings account specifically to cover your insurance deductibles in the event that you need to make a claim.
Homeowners Insurance After Mortgage Payoff…What Does that Look Like?
Once you pay off your mortgage (congratulations, by the way!!), you are no longer legally obligated to keep a homeowner’s insurance policy.
However, you really, really, should. You now have a completely paid for asset on your hands, and in the event that something happens to it, you would be solely responsible to pay the damages without an insurance policy. Not only that, but homeowner’s insurance helps cover the costs to replace your belongings, and to protect your family’s other money from potential lawsuits, guest medical costs, and more.
A few things happen to your homeowner’s insurance policy after mortgage payoff:
- You need to make sure your mortgage company is now OFF the policy, as they should have no further claims on any insurance payouts.
- You will now be responsible for paying your insurance and property taxes each year, instead of just paying your mortgage each month and the money being set aside in an escrow account (most, but not all, mortgages have an escrow account). These bills are typically paid annually, and you’ll need to contact your tax district office and insurance company to make sure the statements come to you.
- You’ll get a refund check of any funds left in your escrow account, once your loan has been fully paid and processed. Expect this to take a few weeks to a month after you make that last mortgage payment.
Use as many of these strategies for how to get cheaper homeowner’s insurance as you can. And, I would LOVE to hear any wins you’ve had from them or from your own secret tricks to get your insurance lowered!
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