How to get home insurance discounts

The cost of home insurance can be as high as the cost of owning a home. The national average cost of home insurance for $250,000 in dwelling coverage in the United States is $1,383 per year, or about $115 per month. The cost of coverage varies depending on where you live, how much coverage you require, the types of coverage you require, as well as other personal information and the characteristics of your home.

If you want to reduce the cost of your homeowners insurance, one of the best ways to do so may be to take advantage of the discounts you qualify for. Knowing how to get home insurance discounts can help you find the best deal when shopping and comparing quotes. Understanding the various types of discounts available may also assist you in making other decisions, such as whether it is worthwhile to install a home security system.

How can I get home insurance discounts?

Home insurance rates are determined by risk factors such as how likely you are to file a claim under your policy. When you reduce your chances of filing a claim by taking certain precautions around your house, your insurance company will frequently reward you with a lower rate.

Bundling

Bundling insurance policies provides one of the highest-percentage home insurance discounts available. You insure both policies with the same carrier when you purchase a home and auto bundle. It not only makes it easier for you to keep track of your insurance policies, but it also means you should be eligible for some kind of insurance company bundling discount. Although the most common bundle is home and auto, you may be able to bundle life and other insurance policies with some carriers to receive a multi-line discount.

Security/safety measures

Another way to get a home insurance discount is to install security and safety features. These measures make your home more secure, lowering your chances of a break-in. They can also alert you to potential hazards such as fires and gas leaks, potentially saving your family from harm or death. Security and safety measures are typically implemented through the use of devices such as:

  • Deadbolts on exterior doors
  • Fire extinguishers
  • Smoke detectors
  • Carbon monoxide detectors
  • Water leak detectors
  • Gas leak detectors
  • Burglar and fire alarm systems
  • Sprinkler system

Depending on the company, some smart home devices, such as smart thermostats and home monitoring systems, can sometimes get you a discount on your home insurance. Some insurance companies also collaborate with smart device manufacturers, providing additional incentives such as free devices.

Home improvements

Another way to get home insurance discounts is to make improvements to your home that will make it more resistant to damage. Installing an impact-resistant roof or storm shutters to reduce storm damage may result in lower home insurance rates. If you live in an older home, some insurance companies may offer discounts for upgrading to a new electrical, heating, or plumbing system.

Loyalty discounts

Some home insurance companies reward you for renewing your policy year after year. Loyalty discounts vary by company and are not always available. For example, Allstate offers a 10% discount to new customers and extends the same discount for each year you remain a customer.

Claims-free

The longer you go without filing a claim, the more money you should save on home insurance with this discount. Most insurance companies provide the discount after three or five years of no claims. The discount is valid until you file a claim with your homeowners insurance company.

New homebuyer

If this is your first time purchasing a home and looking for a home insurance quote, make sure to mention that you are a first-time homebuyer. Not only do first-time homebuyers qualify for this discount, but some companies also offer it to buyers of brand new construction—even if they have previously owned a home.

Early signing discount

The early signing discount is a reduction in your home insurance premium if you sign up with the company before your current policy expires. Most businesses send out renewal notices 30 to 60 days before the expiration date. You may be eligible for this discount if you shop and sign up with a new company before the renewal effective date.

How do home insurance discounts work?

Not all home insurance discounts are created equal. Some are immediately effective, while others only work after you do something, such as improve your home. You can, for example, get an early signing discount if you sign up before your current policy expires. However, unless you make a modification or upgrade to your home, you will not be eligible for a home improvement discount. Here are some pointers to keep in mind when looking for home insurance discounts:

  • Discount amounts can be capped: Though some home insurance discounts are stackable, most insurance companies cap the total amount you can save on a policy.Though the amount varies by insurance company, you can usually qualify for up to 40% off your premiums, but not more.
  • Not everyone receives the full amount: If you see the phrase "up to" when shopping for insurance, it means that not everyone is eligible for the maximum discount. To get the biggest discount, you usually need to meet certain requirements. For example, a company may offer a 5% discount for being claims-free for three years but only a full 10% discount to a homeowner who has been claims-free for five years.
  • Discounts vary: Where you live and the insurance company you choose matter. Not all states allow all discounts, and not all insurance companies provide the same level or amount of discounts. It never hurts to ask for home insurance discounts and research what's available in your state when shopping for home insurance.
  • Shop around for the best results: Just because a company provides numerous home insurance discounts does not imply that it provides the best price. The only way to be certain that you are getting the best deal on home insurance is to shop around and obtain multiple quotes for the same coverage. The most important factor is the final price of your policy, not how many discounts are applied to it.

Other ways to save

Discounts aren't the only way to save money on homeowners insurance. Some businesses provide discounts if you are married. You may even get better rates depending on your ZIP code (except in California and Michigan, which restrict use of ZIP codes as a rating factor for insurance). Another way to save money on home insurance is to buy only what you need.

Other ways to save include:

  • Not smoking
  • Living in a gated community
  • Having a specific occupation, including military service
  • Being retired
  • Increasing the deductible on your home insurance (make sure you can afford the additional out-of-pocket expenses in the event of a claim before considering this option)