What Home Insurance Discounts Are Available?

Homeowners insurance can be exorbitantly priced, particularly in states with a high risk of severe weather. According to the Insurance Information Institute, the average person in the United States pays $1,211 per year for home insurance coverage (III).

The good news is that most insurance companies provide homeowners insurance discounts that can reduce your annual premium. At CompareInsurance, we are dedicated to assisting customers in living a frugal and financially healthy lifestyle. That's why we've compiled a list of common home insurance discounts that can help you save money.

How can I get cheaper home insurance?

Homeowners insurance does not come in a one-size-fits-all package. There are numerous factors that influence your home insurance premium, and these discounts can help you get cheap home insurance. Every person pays a slightly different rate based on personal factors such as zip code, age, credit score, claim history, home size, home age, and more. In addition, each insurance company has a slightly different rate.

The cost of your homeowners insurance is heavily influenced by the type of policy you have. Home insurance policies with more coverage, such as a HO-5 policy, are more expensive than policies with less coverage, such as HO-2 insurance. Furthermore, replacement cost value (RCV) policies are more expensive than actual cash value (ACV) policies due to higher claim payouts.

Even if you choose comprehensive coverage, you do not have to break the bank. Taking advantage of discounts is one of the best ways to reduce your home insurance premium. There are numerous types of home insurance discounts available, and homeowners may be able to save money on multiple policies. We'll go over some of the most common home insurance discounts available from insurance companies.

Types of home insurance discounts

Most insurance companies provide a variety of discounts. Home insurance discounts are typically divided into two categories: the policyholder's characteristics and the home itself. Below is a breakdown of standard home insurance discounts based on category.

Policyholder discounts

Policyholder discounts are the first type of home insurance discount. These are savings based on the policyholder's characteristics. Typically, these discounts account for the majority of home insurance savings.

Policy bundling: Homeowners who insure both their home and their vehicle with the same company are usually eligible for a policy bundling discount. Check with your insurance provider to see what packages they provide.
Claims-free: Homeowners who have never filed a claim, or who haven't filed a claim in several years, may be eligible for a discount on their home insurance. Keep in mind that filing an insurance claim raises your premium.
New home buyer: If you buy a brand new or recently built home, you may be able to save money on your insurance. Some insurance companies offer discounts for homes up to ten years old.
Customer loyalty: Customers who stay with their insurance company for several years can save money on their insurance. If you stay with the same insurance company for at least three years, many companies offer customer loyalty discounts.
Payment method: Almost every insurance company will give you a small discount on your premium if you pay your annual policy in full, or if you sign up for automatic payments if you pay monthly.
Retired homeowner: Some insurance companies offer discounts to homeowners who are retired and over a certain age (usually 55 or older). To be eligible for this discount, you must demonstrate that you are not actively seeking employment.
Occupational discounts: You may be eligible for a discount on your home insurance based on your occupation. Some insurance companies provide discounts to first responders, doctors, teachers, federal employees, and military personnel.
Nonsmoker: If you are a nonsmoker, ask your insurance company if you are eligible for a discount.
Good credit score: Your credit score is one of the most important factors in determining your interest rate. Your annual premium will be lower if your credit score is higher.
Gated community: Homes in gated communities are less likely to be broken into. If you live in a gated community, you may be eligible for a lower insurance premium.
Early signing: Purchasing a home insurance policy before you need it can help you save money on your premium. Some insurance companies will give you a discount if you sign up for a policy at least one week before the start date.
Generational discount: Although this discount is not widely available, some insurance companies offer a discount if the policyholder's parents previously had an insurance policy with the company.

Home improvement discounts

Home improvement, equipment, and upgrade discounts are another type of home insurance discount. The safer your home, the less likely it is that you will file a claim. The insurance company assumes less risk as a result, and as a result, you receive a lower rate.

Fire alarm and sprinkler system: Having a fire alarm system, fire sprinklers, and fire extinguishers installed in your home means it is less likely to be damaged in a major fire. If you have this equipment in your home, you may be eligible for a discount on your insurance.
Security system: Similarly, homes that have anti-theft or security systems are less likely to have a theft claim. Most insurance companies provide discounts for home security systems, whether hardwired or part of a smart home system.
Home renovations: If you have recently renovated or upgraded your home, you may be able to save money on your home insurance. You may be eligible for additional discounts if you install a new electrical or plumbing system, repair foundation issues, or replace your roof.
Storm-proof shutters: Installing storm-proof shutters in your home is an excellent way to reduce your premium, particularly if you live in an area prone to hurricanes or major storms. Storm-proof shutters keep debris and falling objects out of your windows.
Impact-resistant roof: Installing a new roof can also help you save money on insurance. Choose an impact-resistant roof that will last for many years and can withstand major storms to save the most money.

Another option for lowering your home insurance premium is to increase your deductible. Your deductible is the amount of money you must pay out of pocket before the insurance company will reimburse you for a covered claim. Increasing your deductible will not significantly lower your annual rate, but it will save you some money.