How to Save on Homeowners Insurance

When we analyzed homeowners insurance rates across every major variable, two factors led to the biggest savings: who you buy from and what your credit score looks like. For the same $250,000 policy with a $1,000 deductible, the difference between the cheapest and most expensive insurer in our data is $4,416 per year. A homeowner who goes from poor to excellent credit saves $4,869 annually on that same policy.

Qualifying for a combination of home insurance discounts can increase your savings. Bundling home and auto policies is the largest single discount in our data, with most insurers reducing premiums 5% to 25%. On a $3,417 annual policy, the high end of that range saves $854 per year. 

Most home insurance discounts don't apply automatically. Some trigger at quoting; others require documentation or a direct request to your agent. Check with your insurer to confirm what you qualify for, since availability varies by provider and state.

Combining security system and claims-free discounts are the easiest to qualify for, since neither requires switching providers or adjusting your coverage structure. Paid-in-full and loyalty discounts aren't always advertised upfront, so ask your insurer directly rather than waiting for them to apply automatically.

Your deductible is the amount you pay out of pocket before your insurer covers a claim. Raising it reduces your premium because you're absorbing more risk per incident. The math works in your favor only if you can cover that deductible without draining your emergency savings.

The average deductible for home insurance is $1,000, but raising that to $2,000 can save you $336 per year for a policy with $250,000 in dwelling coverage. At that rate, it takes three years of claims-free coverage to offset the extra $1,000 you'd owe on your first claim. Going from $500 to $2,000 saves $584 per year and breaks even in under three years. If you have less than $2,000 in accessible savings, the higher deductible creates a gap you can't afford to close when it counts.

Your homeowners insurance premium rises in direct proportion to your coverage limits. Higher limits mean the insurer pays more if you file a claim, so the premium reflects that added risk. With a $1,000 deductible, a $250,000 dwelling coverage policy costs $3,417 per year, while jumping to $500,000 in dwelling coverage nearly doubles the annual premium to $5,787. 

Choose limits that match your home's actual replacement cost to avoid overpaying and keep home insurance affordable.

Comparing home insurance providers produces the largest savings in our analysis. AIG charges $1,089 per year for $250,000 in dwelling coverage with a $1,000 deductible. Progressive charges $5,505 for identical coverage. The $4,416 difference reflects how differently each insurer weighs risk, credit and location in its pricing model.

The table below shows the best home insurance providers and their rates for $250,000 in dwelling coverage with a $1,000 deductible.

Your credit score directly affects your homeowners insurance premium in most states. Insurers use credit-based insurance scores to predict the likelihood of a claim, and policyholders with lower scores pay more as a result. Not all states allow this practice: California, Massachusetts and Maryland prohibit insurers from using credit scores in pricing.

What surprised us in our analysis is that the difference between good and fair credit is $85 per year, but falling from below fair to poor adds $2,341 annually. The added cost becomes more noticeable the lower your credit score is, which means poor-credit policyholders carry a different burden relative to every other credit tier. If you have poor credit, you may need to opt for a high-risk home insurance company, as some providers may refuse to offer coverage.

Every claim you file stays on your record for five years and increases your premium at renewal. Insurers reward claim-free policyholders with lower rates, and filing a small claim can cost more in added premiums than the payout covers.

On a $250,000 dwelling policy with a $1,000 deductible, a $1,500 repair only gives you $500 from the insurance company. Filing that claim adds $544 to your premium each year. Over the five years it stays on your record, you pay a total of $2,720 in added premiums just to get $500 back.

Reserve claims for losses large enough that the payout clearly exceeds what you'll pay in added premiums over five years.

Homeowners insurance doesn't adjust automatically when your home's value or contents change. The main points for a review are home renovations (which raise your rebuild cost), new high-value purchases that exceed your personal property sub-limits and changes to your home office, since standard policies may not fully cover business equipment.

Dwelling coverage should match your home's current rebuild cost, not its market value. Those two figures diverge every time construction costs change. If you haven't updated your dwelling limit since buying the house, you may be underinsured without knowing it.

Saving on homeowners insurance comes down to two factors more than anything else: which company you buy from and what your credit score looks like. For identical $250,000 coverage with a $1,000 deductible, the difference between the cheapest and most expensive insurer in our data is $4,416 per year. Similarly, the rate change between poor and excellent credit on that same policy is $4,869.

Discounts, deductibles and coverage adjustments all reduce your premium, but the savings are in the hundreds, not thousands. Get at least three quotes before choosing a policy, and ask your insurer whether your credit score qualifies for a lower rate.

We've answered common questions about lowering your homeowners insurance premium.

Homeowners insurance quotes for the same property can vary by thousands of dollars, making it hard to know whether a rate is competitive. Premium data was collected through Quadrant Information Services from major national and regional insurers across all 50 states, more providers than most homeowners compare on their own.

The baseline profile is a homeowner aged 41 to 60 with a credit score of 769 to 792 and no recent claims, which is a low-risk profile most insurers use as a pricing benchmark. The home is a wood-frame house built in 2000 with a composite shingle roof and standard safety features including smoke detectors and deadbolts.

We used standard coverage of $250,000 dwelling, $125,000 personal property, $200,000 personal liability and a $1,000 deductible. Your actual premium shifts with your home's age, construction, claims history and coverage limits, but this baseline reflects what standard pricing looks like across the market.