How to Lower Your Home Insurance Premium

1. Raise Your Deductible

Whenever you file an insurance claim, you're responsible for paying a deductible; your insurance company covers the rest of the costs. A home insurance deductible can be a flat dollar amount, typically from $500 to $2,500, or a percentage of your home's insured value, generally between 1% and 10%. Increasing your deductible can lower your premiums, but you should only do so if you have enough savings to handle the higher deductible if necessary.

2. Don't File Too Many Claims

When home insurance companies set your premium rates, they review all the insurance claims filed on your home in the past seven years—even those made by previous homeowners. Multiple claims can mark your home as high-risk, and your insurance carrier could raise your rates or even drop you. It's best to file a home insurance claim only if repairs cost substantially more than your deductible, you haven't had a claim in the past seven years and you know the loss will be covered.

Tip: If you've owned your home for less than seven years, you can order the property's Comprehensive Loss Underwriting Exchange (C.L.U.E.) report to see if any claims were filed during that period.

3. Make Your Home Safer

Insurance companies may reduce your premiums if you make home improvements that reduce your risk. Installing an alarm system, smart home devices, deadbolt locks, smoke detectors, fire alarms or storm shutters; retrofitting your home to protect against earthquakes; or upgrading to a fire- or wind-resistant roof could save you money on home insurance.

Updating an older home with modern electrical, heating and plumbing systems might also help lower your costs. Before investing in home improvements, check with insurance companies to see which discounts they offer.

Learn more: Why Are My Home Insurance Quotes So High?

4. Reduce Liability Risks

Home features such as trampolines, swimming pools, treehouses and water features are called "attractive nuisances" because they're tempting to children. If a child is injured, even while trespassing, you could be held liable. Removing the nuisance or barricading it with gates or fencing may help reduce your homeowners insurance premiums.

If your dog's breed is considered dangerous, you may be able to reduce your insurance premiums by restraining your pet or proving that it's completed behavior modification training.

5. Don't Overinsure Your Home

If you insure your home for its market value, you're spending more than you need to. Market value is the potential sale price of your home, which reflects market conditions and includes the land the home sits on. Even if your home is destroyed, you won't need to replace the land. Your home should be insured for its replacement cost, or the amount it would cost to rebuild it. Your insurance agent can help you determine your home's replacement cost.

Learn more: How Much Homeowners Insurance Do You Need?

6. Bundle Your Insurance Policies

You can often qualify for a discount if you buy more than one policy from the same insurance company—for instance, buying home insurance from the same place you get auto insurance. Known as "bundling," this can mean significant savings, and also offers the convenience of having all your coverage in one place. If you're looking to switch homeowners insurance, start with your car insurance company and see what kinds of discounts they can offer you.

Learn more: How to Bundle Insurance

7. Investigate Other Discounts

Do a little sleuthing, and you'll likely discover dozens of ways to save on your homeowners insurance premiums. You might be eligible for reduced rates through membership organizations, alumni groups, business or professional associations, your employer or other affiliations.

Some insurance companies offer discounts for retirees, new homeowners or residents of gated communities; loyalty discounts for sticking with the same insurer; or discounts for going a certain number of years without filing a claim. You might save by simply setting up automatic payments, enrolling in paperless billings or paying premiums on time, in full or through an escrow account.

Learn more: Factors That Impact the Cost of Homeowners Insurance

8. Modify Your Coverage

Standard homeowners insurance includes structure coverage, liability insurance, personal property insurance for your home's contents, and additional living expenses (ALE) coverage that helps cover the costs of living elsewhere if your home is uninhabitable. You can typically select different levels and dollar amounts for each type of coverage. Coverage that pays more in the event of a claim costs more. For instance, personal property insurance that covers only the current value of damaged possessions costs less than coverage that pays to replace them with brand-new items.

Learn more: Replacement Cost vs. Actual Cash Value

9. Improve Your Credit

Before issuing a homeowners insurance policy, insurance companies in most states can check your credit-based insurance score. This is a special credit score that insurance companies use to assess your risk of filing a claim. Having poor credit could mean paying more for homeowners insurance than if you had good credit.

Although your credit-based insurance score is different from the credit score lenders use, it's based on many of the same factors, including your payment history, credit utilization and any defaults on your credit report. Checking your regular credit score can give you a good idea of whether your credit-based insurance score needs improvement. Paying down debts, bringing accounts current and making timely payments could help improve both types of credit scores.

Learn more: Does Your Credit Score Affect Homeowners Insurance?

10. Shop Around

Home insurance providers range from traditional insurance carriers to online-only companies. Investigating all your options before buying home insurance could mean substantial savings. You can get insurance quotes online, by contacting insurance companies directly or by working with an insurance agent. An online insurance marketplace can be a convenient way to get multiple quotes with minimal effort. Be sure to compare the same type and amount of coverage.

Tip: Price matters, but so do service and stability. Check each insurer's financial strength using sources such as A.M. Best and S&P, and read online reviews and ratings of the company's customer service.

Frequently Asked Questions

The Bottom Line

Protecting your home is essential. The good news: You don't have to skimp on homeowners insurance in order to save. By researching your options and taking time to compare insurance plans, you can get the coverage you want without breaking the bank.

Having good credit can help you save money on homeowners insurance and has many other financial benefits. You can check your FICO^® Score^Θ and credit report for free from Experian to see where you stand so you can take action to improve your credit score if necessary.