It’s not just buying a home that’s gotten more expensive in recent years—but insuring one, too.
The average home insurance premium increased 21% between May 2022 and May 2023, according to recent analysis by insurance marketplace Policygenius. In some states, the jump was 30% or more.
More natural disasters—and the havoc they wreak—are a big factor in these premium hikes. Increasing construction costs and labor shortages play a role, too.
“To help pay for these higher costs, insurers have increased policy premiums on homeowners in both high- and low-risk areas,” says Pat Howard, a home insurance expert at Policygenius. “Even homeowners in places that don’t experience a lot of extreme weather, like Vermont and New Hampshire, are facing relatively high increases.”
Fortunately, if your home insurance premiums rise, you don’t have to take it lying down. Here’s what you can do to reduce your premiums and make home insurance more affordable.
How to reduce home insurance premiums at renewal time
More than 9 out of 10 homeowners who renewed their policies this May saw an uptick in premiums, according to Policygenius. If you’re up for a renewal (policies typically last for one year), experts say there are several strategies that can help you keep that increase to a minimum.
First, compare insurance companies. While it may be easiest to just renew with the company you’ve always had, take time to get quotes from at least a few other insurers. You can also enlist an independent insurance agent—meaning one not employed by a specific carrier—for help. They can shop around on your behalf and recommend the best policy for your budget.
“Even if you’re happy with your current insurance provider or you’re facing a fairly minimal increase in premiums, an independent agent might be able to find you a company or policy option with lower rates for the same amount of coverage,” Howard says. (To be clear: Most independent insurance agents won’t cost you anything, as they’re usually paid a commission by the company they sign you up with.)
You can also increase the deductible on your current policy. In fact, increasing your deductible by just $500 can save you as much as 20% on your annual premium.
Just know the risks that come with this. When you choose a higher deductible, it means you’ll owe more out of pocket should damage occur. If you choose this route, be sure you have plenty in your emergency savings fund, just in case.
Adjusting your coverage is another way to lower your premium. This might mean reducing coverage on certain items (maybe jewelry that has lost some of its value since you got the policy, for instance) or removing coverage on something altogether—such as a backyard trampoline you no longer have.
Finally, check for potential discounts. Most insurance companies offer several discounts, including for seniors, repeat policy renewals, going claim free for a certain period or bundling your policy with other types of insurance. You may also be able to get a discount by installing safeguards in your home, such as security systems, storm windows or a fire sprinkler system.
How to reduce home insurance premiums as a new homeowner
If you’re just now buying a home, the tips are much the same: Shop around, look for discounts and consider bundling your home insurance policy with other insurance policies you might need—such as life insurance or car insurance. Doing so could help shave money off your premium (which, nationally, averages just over $1,750 a year.)
You should also factor in home insurance costs as you go about your home search. For one, location can play an important role in what you pay. In Vermont, for example, the average premium increase was just 10%, according to Policygenius, while Florida’s was 35%. You can use this king of data to inform where you start looking for a home.
You can also think about home insurance costs when browsing specific properties, as certain features could make insurance more or less affordable.
“If you’re buying near the Gulf of Mexico, you’ll likely pay lower premiums if you buy a brick house that can withstand high winds,” Howard says. “If you’re buying on the West Coast, you may pay less for earthquake insurance if you have a wooden frame house that is flexible enough to withstand frequent tremors.”
The one thing you shouldn’t do? Go without insurance altogether.
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Meet the contributor
Aly J. Yale
Aly J. Yale is a contributor to Buy Side from WSJ.
