5 Proven Ways to Lower Home Insurance Costs in 2024
Home insurance is a critical part of homeownership, offering protection against unforeseen events that could lead to detrimental and costly losses. With premiums continuing to increase, this can put a strain on household budgets. Fortunately, there are strategies homeowners can use to lower home insurance costs without sacrificing coverage.
In 2024, leveraging various techniques and technologies can lead to substantial savings. Let’s explore five proven ways homeowners can reduce their home insurance expenses this year.
What Makes Home Insurance So Expensive?
Several factors can contribute to higher home insurance costs: some homeowners can control and some are fixed. Before we discuss how to potentially lower home insurance costs, lets take a look at some common factors that can raise the cost of home insurance:
- Location: Homes located in areas prone to natural disasters such as hurricanes, earthquakes, wildfires, or flooding typically face higher insurance premiums. Additionally, high-crime neighborhoods may also result in increased insurance costs due to the elevated risk of theft or vandalism.
Avoidance Strategy: While homeowners may not be able to relocate their homes, you may be able to take steps to minimize risks associated with your location. Installing protective measures such as storm shutters, reinforcing roofs, or implementing security systems can help reduce the likelihood of damage or loss, potentially leading to lower insurance premiums. Check with your provider about discounts for these items.
- Older Homes: Older homes may have outdated electrical, plumbing, or heating systems, which can increase the risk of fire, water damage, or other hazards. Insurers may charge higher premiums for older homes due to these increased risks compared to a newer home or one with more updated features.
Avoidance Strategy: Invest in renovations and upgrades to modernize your homes and bring them up to current building codes. Upgrading electrical systems, replacing aging plumbing, and installing energy-efficient appliances not only improve home safety and efficiency but can also lead to lower insurance premiums. There may also be tax saving programs that help with energy efficient appliances or insulation. Check your local and federal tax code for opportunities available to you.
- Previous Claims History: Do you have prior claims? Homeowners who have filed multiple insurance claims in the past may be perceived as higher risks by insurance companies, leading to higher premiums or difficulty obtaining coverage.
Avoidance Strategy: While you cannot change your claims history, think thoroughly through before filing claims for minor damages. Opting to pay for smaller repairs out of pocket instead of filing claims can help maintain a favorable claims history and prevent unnecessary increases in insurance costs.
- High-Value Assets: Everyone loves a bit of luxury, but your insurance company may not. If your home has expensive features such as luxury finishes, high-end appliances, or valuable collections an insurance carrier may require higher coverage limits, resulting in higher insurance premiums.
Avoidance Strategy: Homeowners should accurately assess the value of their possessions and ensure they have adequate coverage without over-insuring. Installing security systems, fire alarms, and safes can also help protect valuable assets and potentially lower insurance premiums. When looking at coverage make sure to consider the difference in replacement value vs market value.
How To Lower Home Insurance – 5 Strategies
1.Increasing Deductibles:
Opting for a higher deductible is one way to lower home insurance premiums. A deductible is the amount a homeowner must pay out of pocket before their insurance coverage kicks in. By choosing a higher deductible, you can enjoy lower monthly premiums. Talk with your agent on which deductibles may make the most impact to your monthly premium costs. There can be different deductibles for storm damage vs other potential issues. Just be sure you can cover the cost of the deductible increase and keep this in savings!
Example: Insurance.com – Savings By State 2024
Insurance.com has some great information about adjusting your deductible and what it can save you depending on which state you live in. Always check around for your particular situation.
2. Enhancing Home Security:
Investing in home security measures can not only protect your property but also lead to insurance savings. Installing burglar alarms, deadbolts, security cameras, and smoke detectors can mitigate risks and qualify homeowners for discounts on their insurance premiums. Insurance companies often view homes with enhanced security features as lower risks, resulting in lower premiums.
According to Zebra.com, homeowners can save up to 10% of their premium with a home security system. Verify with your insurance company any potential discounts and what security measures you need to take.
3. Improving Home Maintenance:
Regular maintenance and upgrades to key home components can also lead to lower insurance premiums. Upgrading roofing materials, reinforcing windows and doors, and modernizing electrical and plumbing systems can reduce the likelihood of damage and claims. Insurance companies may offer discounts to homeowners who demonstrate proactive maintenance practices.
4. Shopping Around for Quotes:
Finally, one of the most effective ways to reduce home insurance costs is by shopping around for quotes from multiple insurance providers. Prices and coverage options can vary significantly between insurers, so homeowners should compare quotes to find the best value for their needs. Additionally, reviewing and updating insurance policies annually can help homeowners take advantage of new discounts and promotions.
Who are the top sites to shop? We love Selectquote, PolicyGenius, Lemonade and the Zebra. When shopping, use a broker who can shop policies at multiple carriers.
If you choose just a State Farm or Allstate agent, they can only provide policies from the carrier they represent. This is the difference between a captive agent (exclusive to one carrier) or an independent agent or broker (works with multiple companies).
Read our review of the Zebra insurance for more detail and additional reviews to come!
5. Changing Coverage Types & Amounts
Similar to a menu at a restaurant, your homeowners insurance has lots of options and features. Choosing which combination is right for you can lower your premiums. For example, if you do not live in a flood prone area and are not worried about water damage you can remove flood insurance and save this money. However, consider that for some carriers if a storm comes through, a window breaks and rain floods your basement you may not be covered as this could be considered a “flood” event.
Instead of removing certain coverages, you can opt to change the amount they are insured for, like your home replacement value. As materials went up in 2020 and beyond, home insurance policies had to increase the amount of “dwelling” coverage and thus premiums went up. Review your dwelling coverage and see if it feels right. Perhaps you opt to reduce some dwelling coverage knowing if you had a catastrophic event you may move to a less expensive to build area, or would reduce the features and fixtures to align with your insurance policy. Also know that for your dwelling coverage many carriers will support up to 120% of the amount listed.
Conclusion- How to Lower Home Insurance 2024
By understanding why and how your home insurance rates may increase each year can help you advocate for reducing your rates. Shopping around online is a great tool many people didn’t have before, but often times you don’t have to jump ship. Working with your agent, asking questions, and being proactive to keep up with your home will give you the ability to negotiate better rates.
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