Best homeowners insurance discounts

Best homeowners insurance companies for roof upgrade discount

The age and materials of your house can also earn you big discounts, but these are typically beyond your control. However, upgrading your home’s electrical, heating and plumbing garners a decent discount of 13%, on average. When you do these upgrades separately, the discount is still decent, though a bit lower. For example, a roof upgrade, gets you an 11% discount. Here’s how carriers offering above the average compare for a roof upgrade price break.

More on common homeowners discounts

Seniors discounts for home insurance

Seniors and retired homeowners are in the house more, naturally, and also have more time for maintenance and repairs, so some insurance companies reward them with savings on their coverage, up to 10%, according to the Insurance Information Institute. Typically, to qualify, the house must be your primary residence, you have to be age 55 or older and work outside of your house less than 24 hours a week. The Hartford/AARP is one example of a company that offers a senior/retired discount on home insurance.

Loyalty homeowners discounts

One caveat on loyalty discounts: You usually have to remain in good standing and many insurers only offer the discount to people who are claims-free for a certain period of time. For ten years, the average savings is 8%, for five it’s 6% and for three it’s 5%.

Loyalty discounts are great reasons to stay with your insurance company, but that doesn't mean you shouldn't shop around. It's still a good idea to get quotes from other insurers every few years at a minimum. Your insurer's loyalty discount might pale in comparison to another insurer's new customer discount and other perks.

Claims-free discounts

The way claims-free discounts are applied, like all other discounts, depends on your insurance company’s guidelines. Some will give the cost savings if you don’t file a claim for three years, for some it may be five or 10. Others will give the discount over a period of years, typically three to 10, and increase it the longer you remain claims-free.

Aside from the discount, before filing a claim, it's always good practice to figure out whether it's worth it. Let's look at an example. Let's say a leaky roof damaged your ceiling. There is a watermark on the ceiling, but there isn't any other damage. You have a $1,000 deductible and repairs will cost about that amount.

In this case, it's best to handle the repairs on your own dime. If you file a claim, you'd have to pay the $1,000 deductible AND your rates will likely increase because you filed a claim and because you’d lose any claims-free discount.

In this case, you'd wind up paying more for filing a claim than paying for it yourself.

Before filing a claim, you should make sure that you're not going to actually lose money in the long run because of filing a claim.

Home insurance discounts for security system

Yes, you do get a discount for having home security features. The amount of the discount depends on the security enhancements and type of alarm system you install. You’ll get more savings for a high-end, central alarm security system that alerts the police of a break-in and includes fire protection than for dead bolt locks and passive burglar alarms that sound, but don't alert the police through a monitoring system.

To qualify for the maximum discount offered by most home insurance companies, your alarm system must include central monitoring that connects to emergency services. When an intruder is detected, it sets off an audible alarm at your house, and the system sends a signal to the alarm company's monitoring facility. The alarm company’s monitoring staff usually calls you first, and if there's no response or you report an intruder, the monitor notifies the police or fire department. A less expensive system with monitoring that contacts you but does not notify the police or fire departments may earn some discount, but it will be less.

While peace of mind may be priceless for some home owners, central monitoring security systems typically come with monthly monitoring fees you must pay, which could mitigate any home insurance discount you earn, so bear that in mind when considering the cost benefit of such systems.

Fire prevention and detection: Sprinklers, alarms, smoke detectors, extinguishers

Fire sprinklers, fire alarms, fire extinguishers located on every floor of the house and smoke detectors will all typically earn you a home insurance discount. Sprinklers and fire alarm systems with central monitoring, meaning that the alarm company staff contacts you and the fire department when a fire is detected, earn the biggest discounts.

New customer discounts

Changing insurance companies can earn you a discount. But most insurers only include the discount for a limited period. So, you'll want to figure out whether the discount for a short time period, say a year or two, is worth changing your insurance -- and losing any loyalty discount.

Living in a gated community or belonging to a neighborhood watch or homeowners association

A gated community, a neighborhood watch and a homeowners association show insurers that you're a less risk.

Insurers offer modest discounts for these scenarios, so if you fit any of these situations, contact your insurance company.

Married

Being married can typically net a small discount. Having a spouse means you're likely more settled than if you're single. Plus, there is a better chance that someone will be in the house than if you're single.

Inflation adjustment

You can get a discount if you're willing to increase your home's dwelling coverage to reflect an inflation increase. Insurers are then able to raise the coverage of your home in case of inflation.

This lets the insurer keep up with rising costs and home rebuilding costs rather than increase the dwelling coverage at renewal time.

Military or other occupational discount

Some insurance companies offer home insurance discounts to active military members. Emergency responders, educators and others may also earn a discount as some carriers offer savings to people employed in these professions.

How to lower home insurance without discounts?

You can lower home insurance costs by doing the following: compare home insurance rates to make sure you’re getting the most affordable price, be sure you buy just the coverage you need with the right deductible and get all the home insurance discounts for which you qualify.

Insurance.com’ average homeowners insurance rates tool provides rates by ZIP code for 10 coverage levels. It also shows the highest and lowest rate fielded from up to six major insurers. The difference between those two shows how much you can potentially save by comparing home insurance rates.

Another easy way to decrease your homeowners' insurance premiums is to raise your deductible. By simply increasing your deductible from $500 to $1,000, you could save hundreds each year. Our "Homeowners insurance deductibles: How to choose the right one" article provides rates by state and shows the savings earned with a higher deductible.

If you are deciding whether to increase your deductible, make sure you have access to money to pay the deductible if you need work. A good idea is to set aside the deductible amount so you will have that money ready in case you ever need it.

There are also cost-cutting steps you can take that don’t officially fall under the umbrella of a discount. Instead, your base rate is decreased as part of the underwriting process. An example of this would be having good credit. There’s no “good credit discount,” but you pay less if you your credit is good.

Home insurance discounts are not always automatically applied to policies so it's a good idea to review your insurer's discounts now to see whether there are any that benefit you. And discount and premiums change, so at every renewal you should check with your insurer to see if there are any new discounts you're eligible for and also shop around to make sure your insurer is still the best one for your needs.

How home insurance rates are set

Similar to car insurance, insurers base your home insurance rates on three factors:

Base rate -- This takes into account your risk factors, such as the location and building materials and age of your home.

Surcharges - Surcharges raise your rate. Examples of surcharges include having a certain breed of dog, pool or other items that are seen as risky to a home insurer. Also, your credit history may trigger a surcharge. Those with bad credit pay more for insurance.

Discounts - Discounts help lower your rate. There are various types of discounts available and they vary by state and company. While one insurer may offer you a 10% discount for paying your bill in full, another might only give you a 5% discount.

Is it right to file a home insurance claim?

Many people are faced with the difficult decision of whether or not to file a claim for damage. Filing claims can lead to an increase in your insurance premiums at the time of renewal. This can happen if it is determined that the damage was caused by either negligence or poor maintenance on behalf of the homeowner.

Also, if you file too many claims in a short amount of time, your auto insurance premiums will skyrocket. This is why it's sometimes better to pay for repairs yourself instead of going through the hassle of submitting an official claim and putting yourself at risk of losing coverage if more accidents happen soon after.

Homeowners insurance policies are not a substitute for maintaining your aging home, but they help you in the event of an unexpected disaster. Make sure you consider how much higher premiums might be post-claim before filing it.