When it comes to homeowners insurance, you want to make sure to get enough coverage to accurately protect your home. But you also don’t want to have to pay more for your coverage than you have to. With the current national average cost of home insurance being $1,211 annually, it makes sense to seek as many savings as you can.
Fortunately, homeowners insurance discounts are not only common, but widely available. An independent insurance agent can help you find the discounts that you best qualify for. But first, here’s an overview of a few of the most common home insurance discounts available today.
What Are Home Insurance Discounts?
When you insure your home, you're signing up to pay premiums, either monthly, quarterly, or yearly payments that may be rolled into your mortgage, in exchange for coverage. If your home gets damaged, your insurance company promises to pay as long as certain conditions are met. Quite simply, home insurance discounts lower those premium payments.
Home insurance discounts operate like a giant computer algorithm that the insurance company uses to calculate how likely your home is to be a risk. The less likely damage, vandalism, etc., is, the less they'll charge you.
Factors in Home Insurance Discounts
A few things that might go into the formula for calculating home insurance discounts include your age, gender, location, marital status, credit score, and driving record. Two things that never go into the formula are your race and religion, since those characteristics are protected by law when it comes to insurance.
Another factor in home insurance discounts is the size of your deductible. A deductible is an amount of money for damage that you agree to pay before your insurance coverage kicks in. The higher your deductible is, the lower your premiums will be since the insurance company would owe less money in case of a claim. Therefore, they pass those savings on to you.
Which Discounts Are You Getting Already?
Not all discounts will be spelled out in your policy, even if they’re still saving you money. You’ll probably know if you’re getting a military or veterans discount, but you might not realize you’re getting a marriage discount, too. It’s all part of the algorithm. Your insurance company isn't likely to share its exact formula with you for many reasons, thus you may not always know every single discount applied to your coverage.
What Home Insurance Discounts Are Available?
When it comes to home insurance rates and potential discounts, it all boils down to how much of a risk factor can be shaved off of your property in order for the insurance company to cut you some slack on your premium. Insurance companies’ four major concerns for homes are fire damage, water damage, theft, and hail damage. A good rule of thumb to start with is if you’ve taken extra measures to prevent these perils, you’re more than likely eligible for a discount.
Here Are a Few of the Most Common Home Insurance Discounts on the Market:
| Discount | Details |
|---|---|
| New Home | Newer homes are cheaper to insure due to fewer plumbing or wiring issues. A brand-new home may lead to significant insurance discounts. |
| Companion Policy | Purchasing auto insurance from the same provider as your home insurance can lead to significant discounts on both premiums. |
| Burglar Alarm | Installing a burglar alarm or security system reduces theft risk, often resulting in insurance discounts. |
| Gated Community | Living in a gated community reduces theft risk, which may lead to lower home insurance premiums. |
| Fire Extinguisher | Measures to reduce fire damage risk, such as having a fire extinguisher, can lead to lower insurance premiums. |
| Sprinkler | A sprinkler system is effective in preventing fire damage and can yield significant discounts on insurance. |
| No-Loss History | A home with no claims history may qualify for a discount on home insurance premiums. |
| Hail Resistant Roof | Upgrading to hail-resistant shingles can lead to significant discounts, especially in hail-prone areas. |
| Pool | Installing a pool can provide a water source for fire departments, potentially resulting in insurance discounts. |
Keep in mind that this is only a list of common home insurance discounts available on the market, and is not extensive. These discounts also may not apply to everyone in each situation, and the availability and amount of the discount offered will vary heavily by the insurance company. Your independent insurance agent can provide you with more information.
How Much Are These Common Discounts Actually Worth?
It’s hard to offer exact dollar amounts for these discounts without knowing which specific insurance company and policy is in question. For starters, not every insurance company offers the exact same discounts, or the exact same discount amounts on their premiums. It’s all highly subjective to your unique situation, but working with an independent insurance agent can seriously increase your chances of finding the best discounts.
That being said, for the more significant discounts such as the new home discount, the companion policy discount, the sprinkler system discount, and the hail-resistant roof discount, you’re likely to see a break of 10% to 15% or possibly even more on your premium. Certain discounts are less significant, such as the gated community discount or burglar alarm discount, where you might only knock 2% to 5% off your premium. Still, every bit helps.
Additional Home Insurance Discounts
There are still many more discounts available for home insurance. Here are some other factors that can help you score a discount on your coverage:
| Discount | Description |
|---|---|
| Tidy Yard | Neatly trimmed grass, shrubs, and trees lower a home's fire risk and show the insurance company that you care about your property. |
| Fresh paint | Fresh paint is safer and also makes your home more visually appealing, and can score you another discount. |
| No trampoline | Not having an "attractive nuisance" like a trampoline is a great way to save money on your coverage due to reduced risk of injuries and lawsuits. |
| Multiple homes | If you own multiple homes, be sure to insure them with the same company for a bundling discount. |
| Military and veterans | Current service members and veterans receive discounts across the board. This should be one of the first things you tell your agent. |
| Teachers | Carriers may offer teachers discounts. Check with your union for details. |
| Union or professional association | Professional organizations often offer insurance discounts. Ask your rep for details. |
| Social, religious, and retirement organizations | Social organizations also cut insurance deals. Check websites and ask around. |
| Loyalty | There are big benefits to sticking with the same carrier. |
| High deductibles | Agreeing to a higher deductible can lower your premiums. |
An independent insurance agent can give you even more options for saving money on your home insurance.
How Hard Is It to Get Home Insurance Discounts?
It mostly depends on the replacement cost of your home. A newer house with up-to-date safety features will have cheaper premiums than an older house. It's easiest to get insurance discounts if your home is newly built or renovated, but it's not the only way to get discounts.
Don't rule out home renovation as an option to start saving money on your coverage. Revamping a home can make it safer, and slash your insurance premiums while raising its value at the same time. Making cosmetic upgrades to your home can also help you earn discounts.
Another simple way to save money on your homeowners insurance is to pay for an entire year’s worth of premiums all at once. If you opt to make monthly premium payments, your insurance company likely will tack on a bit of an extra fee in order to process all the additional checks. Paying upfront with one lump sum can alleviate this extra cost to your premium.
Are Home Insurance Discounts Only Available in Certain Areas?
The availability of certain discounts does depend on the area. Discounts offered in one town or state may be similar to another or may be completely different. So, unfortunately, there’s no master list of discounts available everywhere. Really, it depends on what makes sense for the specific area. For example, various weather-related home insurance discounts would apply to Minnesota residents but not to Florida residents since the states’ weather conditions are so different.
Crime rates are another factor that influences discounts available in a certain area. In areas at higher risk for crime, adding security features to your home or moving to a gated neighborhood will have a much more significant impact than if you purchase a home in an area that’s already determined to be fairly safe and low on crime. However, purchasing a home in a safer area is likely to help you more with your premium in the first place.
How Do I Get Home Insurance Discounts?
Working with an independent insurance agent is a great way to score more discounts on your home insurance. But there are other things you can do to earn discounts, such as making your home safer or updating its plumbing or electrical systems.
These Elements Influence Your Home Insurance Discount Eligibility:
| Element | Details |
|---|---|
| Fire risk | Low fire risk equals lower premiums. This depends on the materials used to build your home, fire safety measures like sprinklers and extinguishers, and how quickly firefighters can respond. |
| Crime risk | Living in a low-crime area and/or installing a security system makes you and your belongings safer, allowing insurance companies to lower your premiums. |
| Location | Different states have varying insurance requirements and risks, impacting premiums based on access to emergency services like police and firefighters. |
| Natural disaster risk | The risk of various natural disasters (e.g., earthquakes, hurricanes) affects your home insurance quote. Areas prone to these risks typically face higher insurance costs. |
| Replacement cost of the home | Insurance costs are based on how much it would take to replace your home, not what you paid for it. Factors include: Unique or expensive materials: Priceless features can lead to higher replacement costs and premiums. Special features: Extras like saunas or pools increase replacement costs and can raise premiums due to higher injury risks. |
An independent insurance agent can further explain which factors go into determining your home insurance rates.
Which Carriers Offer the Most Homeowners Insurance Discounts?
While many homeowners insurance discounts exist, there’s no guarantee that one specific carrier will offer all or even some of them. Discounts are highly subjective to the area you live in as well as a number of other factors. While working with an independent insurance agent is by far the best way to get set up with a policy that has the best possible discount for you, here are a handful of well-known homeowners insurance companies known to offer generous discounts:
| Carrier | Details |
|---|---|
| USAA Insurance Companies | Known for offering bundling discounts, protective device credits (i.e., if you install security alarms, etc.), claims-free discounts, and more, USAA is one of the top-rated homeowners insurance companies. |
| MetLife Insurance | Offering bundling discounts, protective device/safety discounts, and employer group discounts in certain scenarios, MetLife ranks among the top homeowners insurance carriers. |
| Allstate Insurance | Their claims-free discount offers customers up to a 20% break on premiums when switching to Allstate from another carrier without a recent claim. Allstate also offers welcome and loyalty discounts of up to 10%, and retired seniors aged 55 and over are eligible for their own discount. |
One of the top perks of working with an independent insurance agent is that they do all the hunting around for you. They’ll set you up with a policy from a carrier that not only caters to your coverage needs, but that also gives you the best rate, including any discounts you’re eligible for.
What's So Great about Independent Insurance Agents?
Independent insurance agents stay on top of the industry and all the latest discounts so you don’t have to. That means they’ll help find the right homeowners insurance coverage at the right price for you.
They’re not just there at the beginning, either. If disaster strikes and you need to file a claim, they’ll be with you every step of the way, helping you maximize your benefits.
