Home insurance rates have skyrocketed nearly 70% in the past five years, according to ICE Mortgage Technology. For single-family households with a mortgage, premiums are averaging around $2,370 per year.
Areas impacted by natural disasters have seen steep increases in just the past year: Parts of North and South Carolina hit by severe flooding are facing rate increases of more than 7%. Premiums rose nearly 20% in Los Angeles, which saw more than 15,500 acres destroyed by wildfire in 2024.
Regardless of high prices, home insurance is required for most people with a mortgage, and it’s a good idea for nearly all homeowners.
Fortunately, there are ways to lower your premiums. CNBC Select has rounded up nine smart and simple ways to save on homeowners insurance.
1. Bundle home and auto insurance
American Family Homeowners Insurance
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Cost
The best way to estimate your costs is to request a quote
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American Family offers coverage for a variety of situations, including home-based businesses and short-term rentals. The company also offers coverage for vacant homes and vacation homes. A wide variety of policy add-ons can help you get the coverage you need and skip what you don’t.
Progressive customers can save over 20% by bundling. In addition, if your home and car are damaged in the same covered event, you’ll only pay the larger of the two instead of two separate deductibles.
Progressive Homeowners Insurance
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Progressive doesn’t underwrite its own insurance policies. Through its HomeQuote Explorer platform, however, it gathers multiple quotes from over a dozen top insurers to help you quickly compare and save.
2. Seek out other discounts
Even if bundling isn’t right for you, there are plenty of other ways to get discounts on homeowners insurance.
Have connections to the military? USAA rewards customers with no claims for five or more years with up to 15% off. Farmers has occupational and affinity discounts for teachers, firefighters, police officers and others.
USAA Auto Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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USAA’s auto insurance is limited to service members, veterans and their families but it is available in all 50 states and Washington D.C. In addition to low rates and outstanding customer service, it has coverage options for unique circumstances, such as active deployment.
Farmers Homeowners Insurance
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The best way to estimate your costs is to submit your information for a quote
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Policy covers your home and property damages, personal liability and loss of use
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Damage resulting from earth movement, water, nuclear hazard, failure to make repairs, war and fungi — see here for the complete list; contact a Farmers Insurance agent for a list of any exclusions specific to your state
Many brands reduce rates for going paperless, setting up autopay, staying claims-free, installing protective devices and more.
3. Raise your deductible
Your deductible is the amount you pay for a repair before your insurer reimburses you for any expenses. Typically, a deductible is a fixed dollar amount, like $500 or $1,000, or a percentage of the home’s insured value.
Upping your deductible generally lowers your premiums. According to the Insurance Information Institute, increasing your deductible from $500 to $1,000 can lower your rates by approximately 25%.
If you go this route, make sure you have the funds for the additional out-of-pocket expense.
4. Make your home safer
Whether you’re installing a water leak detection system or a security alarm, you can save money by protecting your home and reducing the likelihood of needing to file a claim.
These discounts range from 5% for a simple burglar alarm or smoke detector to upwards of 20% for more sophisticated sprinkler systems.
Protect your property and possessions from fire, theft, and other unexpected perils.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
Amica offers two tiers of homeowners insurance: A standard policy and the brand’s Platinum Choice plan, which covers more situations and has extended coverage for jewelry and liability. Add-on options include computer coverage, sump pump backup coverage, and dwelling replacement coverage.
5. Skip small claims
Filing a claim on your home insurance can cause your rates to rise. If you have a small issue that’s not much higher than your deductible, it’s probably worth just footing the bill yourself.
The average premium goes up 6% after a claim relating to theft, liability or fire, according to data from Bankrate.
If you have a $1,000 deductible, for example, it probably doesn’t make sense to file a claim if your $1,200 laptop is stolen. Not only would your insurer deduct for depreciation, but it could also raise your annual rates for filing the claim.
6. Get rid of “attractive nuisances”
That trampoline you bought for the kids or the small pond you dug out in the backyard could be costing you. Because they attract children and can lead to accidents, they’re considered attractive nuisances by insurance companies, who charge homeowners accordingly.
While the amount varies by item and insurer, it may be worth getting rid of these features, especially if your family is not using them much.
7. Improve your credit score
In most states, your credit history can be used by insurance companies when deciding on approval and rates.
If your credit score could use some work, paying of debts on time and in full is the best way to get your number up. It also lowers the amount of available credit you’re using, which accounts for 30% of your score.
For more help, services like *Experian Boost® will send proof of on-time payments of rent, utility bills, and streaming services to the credit bureaus. That can help you get more positive marks and raise your score over time.
8. Make sure you’re not over insured
When considering the amount of coverage you need, don’t focus on how much you paid for your house or its current market value. After all, you don’t have to buy the land again.
You should base it on the cost to rebuild, by multiplying your area’s building costs per square foot by your home’s square footage. Check with local contractors for their rates or use Angi‘s online calculator to estimate construction cost by ZIP code. For a more specific figure, you can get a replacement cost estimate from an appraiser or contractor.
You may also want to take a new home inventory if you’ve unloaded any assets since your last one, like a Peloton or some expensive jewelry.
If you’re really tapped out, you can reconsider optional coverages. If you live in a low-risk area, for example, you may be able to forego separate flood insurance.
9. Shop around
The insurance company that once offered you an excellent rate may have increased your premiums significantly in the past few years. So, it’s worth comparing rates with at least two or three other competitors to find the best price.
Be sure to obtain quotes with the same coverage amounts and deductibles for a fair comparison. Insurance marketplaces like The Zebra and Policygenius make it easy to get multiple quotes at once.
Homeowners insurance FAQs
Are my home insurance rates affected by my credit history?
Yes, in most U.S. states, your credit history plays a significant role in determining your insurance score, which is then used to calculate your rates. Only California, Hawaii, Maryland, Massachusetts, Michigan, Nevada, Oregon and Utah prohibit or greatly restrict the use of credit-based insurance scores.
How much homeowners insurance do I need?
You should have enough coverage to rebuild your home, replace your belongings, cover your liability and pay for living expenses if you need to temporarily relocate. The cost of rebuilding is known as your dwelling limit — you can calculate it by looking up per-square-foot building costs in your area and then multiplying it by your home’s square footage.
How much does homeowners insurance cost?
The price of homeowners insurance varies greatly across the U.S, depending on where you live, the age and condition of your home, your claims history and other factors. According to ICE Mortgage Technology, homeowners with a mortgage pay an average of $2,370 per year for insurance, or about $197.50 per month.
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At CNBC Select, our mission is to deliver high-quality service journalism and comprehensive consumer advice to our readers, enabling them to make informed financial decisions. Every insurance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content independently of our commercial team and any outside third parties, and we pride ourselves on maintaining high journalistic standards and ethics.
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*Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
