What Home Insurance Discounts Are Available?

Homeowners insurance can be notoriously expensive, especially in states with a high risk of severe weather. In the United States, the average person pays $1,211 per year for their home insurance coverage, according to the Insurance Information Institute (III).

The good news is that most insurance providers offer homeowners insurance discounts that can lower your annual rate. At The Simple Dollar, we’re committed to helping consumers live a frugal and financially healthy lifestyle. That’s why we put together a list of common home insurance discounts that will lower your premium.

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      How can I get cheaper home insurance?  

      Homeowners insurance is not a one-size-fits-all. There are many different components that affect your home insurance premium, and it’s possible to get cheap home insurance through these discounts. Every person pays a slightly different rate based on personalized factors like their zip code, age, credit score, claim history, home size, age of their home and more. Each insurance company charges a slightly different rate, too.

      The price of your home insurance is heavily dependent on the type of policy you have. Home insurance policies that offer more coverage, like an HO-5 policy, cost more than policies with less coverage, like HO-2 insurance. Additionally, replacement cost value (RCV) policies cost more than actual cash value (ACV) policies because the claim payouts are higher.

      [ Read: Types of Homeowners Insurance ]

      Even if you select comprehensive coverage, it doesn’t mean that you have to break the bank. One of the best ways to lower your home insurance premium is to take advantage of discounts. There are many different types of home insurance discounts available, and homeowners may be able to take advantage of multiple savings. We’ll go over some of the most common home insurance discounts that insurance companies offer.

      Types of home insurance discounts 

      Most insurance companies offer a wide range of discounts. Home insurance discounts usually fall into two main categories — the characteristics of the policyholder and the home itself. Below is a breakdown of standard home insurance discounts based on category. 

      [ Read: The Average Cost of Home Insurance ]

      Policyholder discounts

      The first type of home insurance discounts are policyholder discounts. These are savings based on certain qualities that the policyholder has. Typically, these discounts make up the bulk of home insurance savings. 

      • Policy bundling: Homeowners who insure their home and vehicle though the same company usually qualify for a policy bundling discount. Check with your insurance company to see what bundles they offer.
      • Claims-free: Homeowners who have never filed a claim, or haven’t filed a claim in several years, can qualify for a discount on their home insurance. Remember that filing an insurance claim causes your rate to increase.
      • New home buyer: If you purchase a brand new home, or a house that was recently built, you could save money on your insurance. Some insurance companies extend discounts for homes that are up to 10 years old.
      • Customer loyalty: Customers who stick with their insurance company for multiple years can save money on their insurance. Many insurance companies offer customer loyalty savings if you stay with the same provider for at least three years.
      • Payment form: Almost every insurance company will give you a small break on your premium if you pay your annual policy in full, or sign up for automatic payments if you choose to pay monthly.
      • Retired homeowner: Some insurance companies give discounts to homeowners who are over a certain age (usually 55 or older) and are retired. To qualify for this discount, you must prove that you are not actively looking for work.
      • Occupational discounts: You could get a discount on your home insurance based on your job. Some insurance companies offer special savings for first responders, doctors, teachers, federal employees and military service members.
      • Non-smoker: If you’re a non-smoker, ask your insurance company if you can get a discount. 
      • Good credit score: Your credit score is one of the biggest factors that determine your rate. The higher your credit score, the lower your annual premium will be. 
      • Gated community: Homes in gated communities are less likely to get broken into. If your home is located in a gated area, you could qualify for a lower insurance premium.
      • Early signing: Shopping for a home insurance policy before you need coverage can help lower your premium. Some insurance companies offer a discount if you sign a policy at least one week before the policy’s start date.
      • Generational discount: Although this discount isn’t widely available, some insurance companies offer a discount if the policyholder’s parents had an insurance policy with the company. 

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      Home improvement discounts

      The other type of home insurance discounts are related to home improvements, equipment and upgrades. The safer your home is, the less likely you are to file a claim. The insurance company assumes less risk, and as a reward, you get a lower rate.

      • Fire alarm and sprinkler system: Protecting your home with a fire alarm system, fire sprinklers and fire extinguishers means your home is less likely to get damaged in a major fire. If you have this equipment in your home, you probably qualify for an insurance discount.
      • Security system: Similarly, homes with anti-theft or security systems are less likely to have a theft claim. Most insurance companies offer home security systems discounts, whether it’s hard wired or part of a smart home system.
      • Home renovations: If you’ve recently renovated or made upgrades to your home, you could save some money on your home insurance. Installing a new electrical or plumbing system, fixing foundation issues and replacing your roof could qualify you for extra discounts.
      • Storm-proof shutters: Installing storm-proof shutters in your home is a great way to lower your premium, especially if you live in an area that is susceptible to hurricanes or major storms. Storm-proof shutters protect your windows so debris and falling objects can’t cause damage.
      • Impact-resistant roof: Installing a new roof can also help lower your insurance cost. For maximum savings, go for an impact-resistant roof that lasts many years and can withstand significant storms. 

      If you’re looking to lower your home insurance premium, another option is to raise your deductible. Your deductible is the amount of money you’re required to pay out-of-pocket towards a covered claim before the insurance company will reimburse you. Increasing your deductible won’t lower your annual rate significantly, but you can save some money.

      [ Read: Home Insurance Quotes, Explained ]

      We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

      Elizabeth Rivelli

      Contributing Writer

      Elizabeth is a contributor to The Simple Dollar, where she reviews insurance providers and policies. She has more than three years of experience writing for top online insurance and finance publications, including Bankrate, Coverage.com and Reviews.com.

      Reviewed by

      • Nashalie Addarich
        Nashalie Addarich
        Editor

        Nashalie Addarich is an editor for The Simple Dollar. She recently made a career switch from the legal field, where she was an attorney in Washington, DC. In her free time, she enjoys learning new languages. You can also find her editorial work on Reviews.com.