Shopping for homeowners insurance may seem confusing, but it's really a matter of picking from a menu of options to find the amount of coverage needed. The price paid for an insurance policy depends, in part, on the options chosen. To help you prepare, we're covering some of the basics of buying homeowners insurance.
The most common homeowners insurance discounts
Homeowners need insurance. Mortgage lenders require it, and frankly, carrying insurance is the smart financial move. Another smart financial move is to refuse to pay more than needed for great coverage. To help policyholders land the best price, home insurance providers offer homeowners discounts of all kinds, including the following.
New home discount
When a person moves into a brand spanking new house, insurers assume that everything will be in decent shape. They worry less about the roof blowing off or water leaking into the family room. They also assume that the house has up-to-date safety features. Anyone who has just purchased a new home can insure it for up to 35% less than an existing home.
Senior discount
Insurers make some assumptions when it comes to homeowners over the age of 55. For one thing, they assume an older homeowner has more time for maintenance and repairs. Whether the assumption is correct or not, many insurers offer special homeowners insurance discounts to people over the age of 55.
Bundling discount
When a person purchases their home, auto, and (possibly) life insurance from the same insurance company, it's called bundling. Companies love bundling and offer discounts to those customers who take advantage of one-stop policy shopping.
Claims-free discount
What an insurance company likes more than anything else is a customer who pays their premiums without making claims. If a homeowner has gone a number of years without making a claim, it's worth checking to see if they qualify for home insurance no-claims discount.
Loyalty discount
Because insurance is a business, insurers appreciate customers who stick around. If a homeowner stays with the same company for a certain amount of time, they are typically eligible for a loyalty discount. A home insurance provider may require those long-term customers to be claims-free for a specific number of years.
Impact-resistant roof discount
Before a homeowner has a new roof installed, it pays to learn if an insurance provider offers any homeowners insurance discounts for impact-resistant roofs. While impact-resistant shingles can cost twice as much as standard shingles, they can pay off big for homeowners in areas prone to wind and hailstorms. Simply put, they stand up better to harsh weather and ultimately require less repair.
Security system discount
Because security systems can reduce the chance of break-ins and monitored systems allow police to respond quickly, insurers offer homeowners insurance discounts to people who use monitored security to protect their property.
HOA discount
Though Americans have a love/hate relationship with homeowners associations (HOAs), insurers adore them. That's because HOAs tend to set high home maintenance standards, a fact that helps protect the value of the homes in the community. Since they have a vested interest in the condition of the properties they protect, insurers will often offer a discount to homeowners who live in HOA neighborhoods.
Safety discount
Anything a homeowner can add to their property that provides an extra layer of protection is good in the eyes of insurance companies. Sprinkler systems, fire extinguishers on every floor, smoke detectors, carbon monoxide detectors, and fire alarms with central monitoring can all lead to a safety discount.
Non-smoker discount
From the years 2012-2016, smoking was the leading cause of fire deaths at home. For good reason, insurers hate fires. Homeowners who don't smoke may qualify for homeowners insurance discounts.
New customer discount
Everyone should conduct an insurance "check-up" at least once a year. That means making sure they always have the coverage they need and at the best possible price. If a homeowner does change insurers, they may earn a discount for doing so.
Professional discount
Insurers routinely offer homeowners insurance discounts to particular professions, like active military members, educators, police officers and other emergency responders.
Married discount
It may be 2023, but some insurers figure that anyone who is married must be more "settled" than a person who is single. That's why they'll discount home insurance quotes for those who are married. Yes, it's an antiquated idea, but it's a discount worth exploring if you have a spouse.
How can I get a discount on homeowners insurance?
The average cost of home insurance in the U.S. varies widely by state. For example, the average annual cost of homeowners insurance in New Hampshire is $813. In Nebraska, it's a whopping $4,398. Nationwide, the average is $1,787, or $149 per month. Of course, homeowners with larger-than-average properties can expect to pay more. If you're interested in how to get discounts on homeowners insurance, here are some of the best home insurance savings tips:
- Shop around. Don't assume that all insurer's rates are the same or that they use the same criteria to determine rates. It's possible to save hundreds of dollars a year by shopping.
- Ask an insurance agent for all of the homeowners insurance discounts available through their company, no matter how small.
- Take advantage of obvious discounts. For example, make sure there's a fire extinguisher on every floor, smoke alarms, carbon monoxide detectors, and other potentially life-saving equipment installed in your home.
- Find out what each insurance provider considers an "attractive nuisance." An attractive nuisance is anything dangerous that may attract children and pose a health or safety risk. Examples of attractive nuisances are trampolines, swimming pools, bike or skateboard ramps, and treehouses. Even a large fountain filled with water or a koi pond could be considered an attractive nuisance. While foregoing these attractive nuisances won't earn you homeowners insurance discounts, having them will likely hike the rate of your policy.
- Raise the deductible. The more you're comfortable paying as a deductible, the lower the policy rate.
Which companies offer the best home insurance discounts?
The company with the best homeowners insurance discounts depends on the type of discount being discussed. To come up with a list, we looked first at the J.D. Power rankings to learn which insurers enjoy high customer satisfaction ratings. After all, homeowners insurance discounts don't mean much if a homeowner can't count on their insurer to come through when needed. Of those highly ranked by J.D. Power, here are four that offer attractive discounts.
Amica: Best for loyalty discount
Amica is not only one of the top-rated homeowners insurance providers in the country, it also offers one of the best loyalty discounts. The longer the homeowner stays with Amica, the deeper the discount.
The Hartford: Best for retirees
As every AARP commercial indicates, The Hartford is keyed into the unique needs of older homeowners. For homeowners who work less than 24 hours each week, the retiree discount can be impressive.
Allstate: Best multi-policy discount
Bundling policies with Allstate can save up to 25%. There are a couple of advantages to bundling insurance products: The first is the convenience of handling multiple policies through the same customer service line, insurance agent, or online portal. The second is the ability to save one quarter of the premium costs. For example, if a homeowner pays the national average home insurance rate of $1,787, bundling could offer a savings of $447.
State Farm: Best discount for roof coverage
For people who opt to use hail-resistant shingles, State Farm offers one of the more unique homeowners insurance discounts. In addition to paying replacement cost, State Farm does not require policyholders to pay a larger deductible for a roof loss (like some insurance providers do).
Exposure to the different types of homeowners insurance discounts illustrates how they vary by company. Still, a discount on your policy can make all the difference when the budget is tight. Fortunately, with so many strong insurers to choose from, homeowners have plenty of options.
Fact Checked
Ashley Maready