8 Ways to Save Money on Home Insurance

September 8, 2010

If you can save money on home insurance each month your annual savings from those lower insurance rates can add up over time.  Home owners insurance is a tricky expense, you don’t want to get really cheap insurance and put your home at risk but you also want to avoid high insurance rates.

Nonetheless you can’t buy a house without home insurance so why not take some time to make sure you aren’t spending too much?  Here are a few tips to help you save money on home insurance.

Get Coverage to Match Your Needs

If you’ve owned a home for a while you might have too much insurance. Most policies have a yearly adjustment for inflation, while this is generally a good idea you need to also factor in economic conditions. Building costs have dropped with the fallout of the financial crisis. A home that might have needed $200,000 in rebuilding coverage might only need $175,000 today. Ask your insurer to re-evalute the coverage and you could save money.

Never Neglect Flood Insurance

Never, ever neglect having flood insurance if you live anywhere remotely close to water. Of course this won’t save on your homeowner’s insurance premiums, but it will save you a lot of money and distress if your home is ever flooded. Also make sure you go through the policy with a fine-tooth comb to make sure you understand exactly what is covered.

Pay Your Insurance Company Yourself

When you first setup your mortgage the bank may require you to put your insurance and property tax into escrow and let them pay it. It may not be a huge sum of money, but those are your dollars sitting in their coffers not earning you any interest.

If you can, get the bank to let you pay your insurance company on your own and stop taking the escrow amount out of your payment every month. (Just don’t forget!)

Increase Your Deductible

Just like with car insurance — the higher your out of pocket deductible, the cheaper your premium. If you’re worried about being able to afford the higher deductible, take the money you save from lower premiums each month and put it into a separate online savings account to help you cover the cost.

Don’t Always Combine Insurance Policies

It’s commonly thought that getting your home and auto insurance from the same company will save you money but it may not always be the case. First see what the individual policies would cost at multiple insurance companies. Then go back and use the same insurers to get the combined quote and go with the best home insurance rates.

Buy an Alarm System

Increasing your home’s security with better locks and an alarm system can lower your homeowners insurance. Of course it probably won’t lower it enough to offset the cost of having the alarm monitoring service, but it should take a small bite out of that monthly cost.

Improve Your Credit Score

Did you know some insurance companies take your credit score into account while when your coverage eligibility and insurance rates?  There are a variety of factors that insurance companies use to analyze your situation so a bad credit score itself a deciding factor but it can play into their decision.  So improve your credit score and it can help you not only get lower mortgage rates but also save money on insurance.

Get Multiple Home Insurance Quotes

Competition is good for the consumer, don’t be afraid to use it to your advantage to get a better deal.  These days its fast and easy to get home insurance quotes online so be sure to compare home insurance rates and policies from multiple sources.

Make sure you’re comparing the same levels of coverage and premiums when you’re looking at costs.  Cheap insurance can save you money but you want to be sure you’re sufficiently covered if something does go wrong.


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Kevin Mulligan is a debt reduction champion with a passion for teaching people how to budget and stay out of debt. He's building a personal finance freelance writing career and has written for RothIRA.com, Discover Bank, ING Direct, and many others.

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7 Responses to 8 Ways to Save Money on Home Insurance

  • Frank

    Thanks for the great tips. Here’s another; always check what all discounts your home insurance company is offering. I just mentioned to my agent in passing that I had retired from my job and now planned to work from home. That got me a “Retiree Credit” from my home insurance company.


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