You can save on home insurance premiums by using the many available discounts and making choices that lower costs without compromising on coverage. A home is one of the most valued assets an individual can own, so it makes sense that you would want to protect it with comprehensive insurance coverage.
The average homeowner in the US pays $211 per month for their home insurance. That's $2,500 annually for a $300,000 home with attached structures such as a garage, fence or shed.1
The age and location of a home are significant factors when determining insurance premiums, but recently, premiums have risen due to inflation and the increased frequency of natural disasters. This increase is taking a larger bite out of homeowners' budgets, so it makes sense to look for smart ways to reduce this burden without compromising on coverage.
If you own a home or are looking to review your insurance, these discount strategies could help you save money on your homeowners' insurance.
What homeowners' insurance discounts can you actually use to save money?
1. Multi-policy discount
Bundling your homeowners' insurance with other policies, such as excess liability or auto, can lead to significant discounts. It can also reduce paperwork and make it easier to manage multiple policies with the same advisor or insurance carrier.
2. Claims-free discount
If you have a clean claims history, you may be eligible for better insurance premiums with discounts. Some insurance providers offer "claims-free" or "loss-free" discounts when customers have reached certain milestones (five years or 10 years) without filing a claim. On the other hand, filing more claims will cause your rate to increase.
3. Payment method discount
Some insurance carriers offer discounts for certain payment methods, such as making full annual payments or opting for automatic payments for future premiums and insurance renewals.
4. Higher deductibles
Choosing a higher deductible can reduce your monthly premiums. For instance, increasing your current deductible from $500 to $1000 can lower your annual premium. However, your out-of-pocket expense in case of a claim will be higher.
5. Green home discount
Homes that meet certain energy-efficiency standards or hold eco-friendly certifications could qualify for a green home discount. Houses built using sustainable, safe and moisture-resistant materials have better durability, which lowers maintenance expenses over time. Additionally, efficient systems can detect and prevent risks of fire and water damage. Opt for solutions like ENERGY STAR-certified appliances, solar panels, high-efficiency insulation and windows, smart thermostats and rainwater harvesting systems to become eligible for this discount.
6. Home upgrade discounts
These discounts reward homeowners who upgrade or modernize their electrical wiring, plumbing, heating systems and more. Such upgrades significantly reduce the likelihood of accidents or damage.
7. Smoke-free discounts
Households without smokers can be eligible for this discount, because their homes have a lower risk of fire-related accidents.
8. Storm shutter discounts
This discount is available to those who install systems that minimize storm damage in high-risk areas. Upgrades can include hurricane shutters, reinforced roofing and impact-resistant windows.
9. Work-from-home discount
As more individuals work from home now, insurers may offer discounts to these households because occupied homes are less likely to face theft or have unnoticed fire and water hazards.
Which homeowners' insurance discounts are you eligible for?
New home buyer discount: Many insurers offer discounts and savings to new home buyers. These discounts are typically applicable within the first year of buying the property.
New home construction discount: A new construction project has updated electrical wiring, plumbing and roofing, which reduces the risk of claims. If you're moving into a newly built home, you'll likely qualify for a discount from your insurer.
Gated community discount: Many insurers offer discounts or deductions for homeowners in gated communities, as these properties typically face lower risks of theft and vandalism.
Retired or mature discount: This discount is typically offered to people over the age of 55 because they're likely to spend more time at home, which reduces the risk of theft or major damage. People in this age group are also perceived to be more responsible and cautious, leading to fewer claims.
Occupational discount: This discount is often given to individuals in certain professions such as active military members, first responders, teachers, engineers and nurses.
How can safety devices help you lower your home insurance costs?
Aside from price deductions, you can also upgrade your properties with certain safety and prevention devices to reduce the overall risk and potentially lower premiums.
Fire and smoke prevention: Installing devices like monitored fire alarms, smoke and carbon monoxide detectors, and sprinkler systems can help prevent fire damage through real-time alerts and faster emergency response.
Water damage prevention: Insurers can offer discounts on premiums for properties that are adequately protected from water damage. You can install devices such as smart leak detectors, automatic water shut-off systems and sump pumps with battery backup to help safeguard your property.
Theft and intrusion prevention: Installing professionally monitored burglar alarms and security systems can provide an immediate emergency response in the event of burglary or trespassing. Insurers prefer homes with such systems, because they reduce the likelihood of claims and potential payouts. Additionally, these security systems deter potential burglaries or trespassing.
Talk to a Gallagher advisor
If you're looking to lower your premiums or change your insurer, be sure to inquire about these discounts or any additional ways of reducing costs.
For a comprehensive understanding of your coverage options and insurance carriers available in your area, connect with our Personal Insurance advisors. Working with a specialist advisor makes comparing quotes easier and helps you understand for which insurance options you're eligible. Contact a Gallagher advisor today.
Homeowner insurance discount FAQs
Can I get a discount on my homeowners' insurance?
Yes, most insurers offer discounts on homeowners' insurance. Look into bundling your home and auto policies, installing security systems, upgrading your home, maintaining good credit and being claims free to obtain discounts. It's best to check with your advisor to find out for which what discounts you qualify.
What is the 80% rule in homeowners' insurance?
This rule means that your insurance company will fully cover damage costs only if your home is insured for at least 80% of its total replacement value. If your coverage is lower, you'll need to bear some of the costs yourself.
Is it better to have a $500 deductible or $1,000 deductible?
A $500 deductible results in higher monthly premiums but lower upfront costs when filing a claim. On the other hand, a $1,000 deductible lowers your premiums, and you'll be paying more upfront in case of damage. Choose based on your budget and risk level.