Purchasing a home and paying off a mortgage is a serious financial undertaking. And while acquiring homeowners insurance may not be legally required, it’s imperative for protecting what is likely your largest financial investment. Damage to your home could cost you a severe amount of money should it have to come out of your wallet instead of through an insurer. Additionally, the mortgage lender likely requires insurance. Homeowners insurance can feel like a frustrating added expense, especially if you’ve never had a claim before. But there are ways to save money by lowering your insurance premium.

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1. Bundle your insurance policies

Most people who have homeowners insurance have car insurance, too. Bundling these policies together typically qualifies consumers for a discount and is a great way to save on homeowners insurance and car insurance. This does require a consumer to have the same insurance company for both policies, though. If the car insurance and homeowners insurance policies are handled by different companies, then it’s worth contacting each company to see what the bundled cost would be and consider switching both policies to the same carrier. When comparing policies, be sure that what is offered in each policy is the same, including the deductibles, coverage, timeframe of the policy, etc.

Consumers may not be limited to bundling their homeowners insurance with their car insurance. If a homeowner has other types of insurance — renters, life, umbrella, etc. — he or she can bundle those policies together to help save money on a homeowners insurance policy, as well as any other policies.

2. Raise your homeowners insurance deductible

One of the simplest ways for a homeowner to lower their premium is to raise their policy’s deductible. If a homeowner currently has a $1,000 deductible, he or she would be responsible for the first $1,000 on a $5,000 claim. The insurance company would then handle the remaining $4,000. Comparatively, a person with a $2,000 deductible would need to pay $2,000 for the same $5,000 claim before the insurance company kicked in to pay the remaining $3,000. Essentially by raising the deductible, the consumer accepts more of the financial risk from the insurance company, and in turn, pays a lower premium. This is a great way to save money each year, but for homeowners who end up having a claim, it will cost more at claim time.

Before a homeowner raises the deductible to save money in the short term, the homeowner should make sure that he or she is financially able to pay the higher deductible in the event of a claim.

3. Consider changing your level of coverage

Homeowners have the option of insuring their belongings at actual cost value (ACV) or replacement cost value (RCV). This means that the type of insurance a homeowner could have will vary depending on what they're insuring. If homeowners want to pay a cheaper premium, they should select ACV coverage. But similar to raising the deductible, this will be more costly in the event of a claim. Because insurance companies will only pay for the items’ value at the time of the claim, the homeowner won’t receive as much as money as he or she would with replacement cost coverage or guaranteed/extended replacement cost. For example with ACV coverage, if a homeowner buys a $1,000 flat-screen TV and it’s stolen two years later, the insurance company will only pay the TV’s value today. But with RCV coverage, the insurance company would pay what it actually costs to replace the TV. You can always ask your insurer if this is the type of coverage that would best fit your home.

4. Install home safety features to your house

The safer a home is, the less likely it is to require a claim. Insurance companies understand that concept and typically reward their customers who do home upgrades to protect their home. So what types of safety features will qualify for a discount? Purchasing smoke detectors, fire extinguishers and home security systems all typically help lower premiums. Other items, such as storm shutters and hail-resistant roofs, often help consumers qualify for discounts, too. Check with your insurance company to see what specific safety features will help save on the bottom line.

5. If you’ve been claim free, shop for a good deal

For homeowners who’ve had insurance for a number of years and have been claim free, it’s worth checking to see if the policy qualifies for a discount with the current insurance company. Many carriers offer a discount for remaining claim free for a certain number of years. If the current insurance company isn’t one of those carriers, it may be worth taking the time to shop around. Many other insurance companies offer discounts for new customers who come to them without past claims.

If you are planning to purchase a home for the first time or are a recent first-time home buyer, check out “A practical guide for understanding homeowners insurance”.

Whether or not you already have your home protected against disasters, looking to see what's on the market is not a bad idea. We also have a free comparison tool that will let you compare quotes from different companies. You'll be able to not only compare insurance costs, but the overall feel of various companies as well.

The content on this site is offered only as a public service to the web community and does not constitute solicitation or provision of legal advice. This site should not be used as a substitute for obtaining legal advice from an insurance company or an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter. The comments and opinions expressed on this site are of the individual author and may not reflect the opinions of the insurance company or any individual attorney.