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HOME INSURANCE INSIGHTS

This guide will cover:

  • Average savings for common home insurance discounts
  • How home insurance discounts work
  • Examples of home insurance discounts that most insurers offer
  • Ways to save on your home insurance bill other than discounts

Home insurance companies offer discounts that can save you money, but it's up to you to make sure you're getting all the homeowners insurance discounts you deserve. That way you can ensure you have sufficient coverage, but at the same time still be getting the cheapest home insurance for your particular situation.

Homeowners insurance discounts

What discounts are available for homeowners insurance?

The discounts that trim the most from your home insurance cost generally relate to your home’s age, building materials, roof condition, its type of security system and your payment methods. 

Top 10 homeowners insurance discounts

Of the discounts Insurance.com surveyed, here are the top 10 types of home insurance discounts that save you the most:

  • New home construction
  • Age of home (five years or less)
  • Home and auto bundle
  • Series of upgrades (electrical, heating, plumbing)
  • Age of home (10 years or less)
  • Construction type (fire resistive, superior)
  • Roof upgrade
  • Advance purchase
  • Loyalty (10 years or more)

Here are the average annual percent savings you can get for common discounts, based on Insurance.com’s rate data analysis.

CompanyTypeAverage discount
New HomeNew Construction Recently Purchased40%
Age of home5 Years Old26%
BundleHome And Auto18%
UpgradesElectrical, plumbing, heating done at once or over recent short period of   time13%
Age of home10 Years Old13%
Construction typeFire Resistive11%
Construction typeSuperior11%
UpgradesRoof Upgrade11%
Advance Purchase10+ Days Advance Purchase9%
Advance Purchase7 Days Advance Purchase8%
Loyalty10+ Years Renewal8%
Construction typeMasonry7%
Construction typeFrame - To 66% Masonry Veneer6%
Construction typeFrame - Over 66% Masonry Veneer6%
Paid in FullPaid in Full6%
Loyalty5 Years Renewal6%
SprinklersSprinklers6%
Claims Free5 Year Claims Free5%
Claims Free10+ Year Claims Free5%
Hail Resitant RoofHail Resistant Roof5%
Loyalty3 Years Renewal5%
Construction typeAsbestos/Stucco4%
Fire AlarmCentral Station4%
Fire AlarmFire Department4%
Gated CommunityWith Patrol4%
BundleHome and Umbrella4%
BundleHome and Life4%
Burglar AlarmPolice Department4%
Burglar AlarmCentral Station4%
Age of home15 Years Old4%
Water Safety SystemWater Leak Detection - Shut Off And Alarm4%
Water Safety SystemWater Leak Detection - Shut Off3%
UpgradesElectrical Upgrade3%
Gated CommunityWithout Patrol3%
Water Safety SystemWater Leak Detection - Alarm3%
Automatic paymentsElectronic Fund Transfer3%
UpgradesPlumbing Upgrade2%
Construction typeFrame - To 33% Masonry Veneer2%
Burglar AlarmLocal2%
UpgradesHeating Upgrade2%
Fire AlarmLocal2%
Age of home20 Years Old2%
Smoke DetectorSmoke Detector2%
Fire ExtinguisherFire Extinguisher2%
Storm ShutterStorm Shutters1%
DeadboltDeadbolt1%

homeHere are some explanations of the discount categories in the chart above:

  • Homes are classified by insurers as frame, masonry or superior. You get a bigger discount for a "superior" classification because the floors, roof and exterior walls are made of metal, concrete or other noncombustible material.
  • Fire resistive materials are those that don't allow electrical currents to pass through, so are favored by insurers.
  • Burglar and fire alarms are also classified. A system with central monitoring in place is called "central station." These systems are equipped with central monitoring staff who will take action by alerting the police and fire departments and by calling the homeowner to verify the incident. Fire department/police department systems directly alert police and fire departments. "Local" alarms are systems with audible alarms and other features that only alert the homeowner -- there is no auto-response so someone would have to call the police or the fire department.

Now that you have an idea of how much home insurance discounts can save you, let’s learn more. This guide will explain how home insurance discounts work, provide examples of home insurance discounts that most insurers offer and suggest other ways to save on your home insurance bill other than discounts.

How do home insurance discounts work?

Some home insurance discounts are applied when you buy a homeowners insurance policy, while others go into effect when you upgrade your home or make a change to your policy.

If you buy a new policy, look through your insurer's information for any discounts for which you might be eligible. Don't be afraid to ask your insurance company if you're not sure if you're eligible for a discount. Common discounts you can receive when you purchase coverage include a home and auto bundle and new home discount.

If you already have home insurance, you don't have to wait to renew your policy to get discounts. Contact your home insurance company and provide them documentation in cases such as a new roof or security system. You can start enjoying the benefits of discounts today.

There are also policy-level discounts that may arise over time. For instance you may qualify for a loyalty discount or a claims-free discount if you’ve had the same policy in effect for years and haven’t made any claims. That’s why it’s prudent to check in with your insurance company at least upon renewal even if you haven’t done any work on your home.

It’s also important to know the following:

Discount amounts can be capped. You've read about all of the above discounts and you're adding them up in your head. Now, for the bad news -- insurers usually place limits on the total percentage of discounts you can receive. The discount cap varies by insurance company, but can be around 30% or 40% in some cases.

Not everyone gets the “up to” amount. You may see at insurance websites that a discount saves “up to” a percent or dollar amount. Not everyone gets that amount. The highest savings amount may only be for those who meet certain qualifications, for instance homeowners with excellent credit who have not filed any claims for a period of five years. Your discount amount will depend on your homeowner profile, where you live and your insurance company.

Discounts vary by state and insurance company. Not all discounts are offered in all states, or by all insurance companies. Many carrier websites’ discount sections will include in the small print a listing of which states are either included or excluded, so look for that when researching. And of course, one insurance company may offer a discount for, say, living in a gated community, while another may not.

Getting lots of discounts doesn’t always mean you’re paying the lowest price. Keep in mind that discounts don’t remove the need to comparison-shop your coverage periodically. You may find that a homeowners insurance company offering only a few discounts gives you an overall lower price for your policy. So getting discounts is great, but at the end of the day what you need to look at is the final premium you'll pay. A company with a lower base premium and fewer discounts may beat out a company that offers many discounts but has a higher overall premium.

How to get home insurance discounts

Homeowners discounts generally fall into four categories, those that relate to:

  • Your home’s building materials, age and upgrade status
  • Your home’s security
  • Your policy
  • Your homeowner profile

In terms of weather damage, accident and theft prevention, you can earn discounts by doing the following, and notifying your insurance company:

  • Upgrade your electrical, plumbing, heating system   
  • Install storm-proof materials
  • Install water-leak and fire-prevention systems or alarms, sprinklers, smoke detectors etc.
  • Install security system, or deadlock bolts

When it comes to your policy, you can earn a discount by doing the following:

  • Bundling your coverage with your auto insurance, or other types of insurance
  • Staying with the same company to earn a loyalty discount
  • Not filing claims for three to five years
  • Paying in advance, paying in full, or setting up electronic funds transfer

Your particular life circumstances may net you a savings, so if you do the following, some insurance discounts may apply:

  • Being married
  • Being a non-smoker
  • Being retired
  • Living in a gated community
  • Being in the military, or having a certain type of job

Best homeowners insurance companies for new home discount

Buying a brand new home is a huge milestone for many, and an added bonus is getting one of the highest discounts when you buy homeowners insurance. If you are buying a new house, read our guide to insurance for new homeowners. The average new home discount is 40%, but it can be higher or lower, depending on your insurance company, homeowner profile, state and other factors. Below you’ll see how carriers who offer a higher than average new-home discount compare on savings, according to Insurance.com’s 2021 data:

Company% savings
Nationwide76%
ASI Lloyds74%
Citizens65%
Travelers63%
California Automobile Insurance Company62%
Peoples Trust61%
CSAA Insurance Group58%
Grange58%
Security First57%
American Strategic Ins. (ASI)57%
Georgia Farm Bureau55%
American Family55%
Garrison55%
Federated National54%
USAA54%
Auto Club Group53%
Alfa53%
Pemco53%
Cincinnati Insurance52%
State Farm51%
Depositors51%
Hawaiian Insurance & Guaranty51%
Erie51%
MetLife51%
Allied50%
Allstate47%
State Auto47%
St Johns46%
New York Central Mutual (NYCM)45%
United Farm Family45%
Memberselect (AAA)45%
Virginia Farm Bureau44%
Lighthouse44%
Nodak Mutual43%
New Jersey Manufacturers (NJM)43%
American Commerce (MAPFRE)42%
Maison42%
Farm Bureau42%
Fidelity Ins.41%
Automobile Ins. Co. of Hartford (Travelers)41%
Century Ins.41%

Best homeowners insurance companies for home and auto bundle discount

Based on Insurance.com’s 2021 home insurance discount rate analysis, new home discounts save more than bundling, but you may not be buying a new house, and chances are you do have a car. Let’s look a bit closer at bundling since this is one of the biggest discounts you can get – on average 18%. Your savings will depend on the type of home you own, where you live, your insurance company, among other factors.  An insurer will usually give you the multi-policy discount when you start your policy or begin bundling multiple types of insurance.

Here are the top insurance companies for home and auto bundle discounts, offering above the average savings, based on Insurance.com’s rate analysis:

Company% savings
   
MetLife   
   
43%   
   
Nationwide    
   
39%   
   
United Farm Family    
   
33%   
   
State Farm    
   
33%   
   
Grange    
   
33%   
   
American    
   
31%   
   
CSAA Fire & Casualty   
   
30%   
   
Massachusetts Bay    
   
29%   
   
Farmers    
   
28%   
   
State Farm    
   
28%   
   
Allstate    
   
27%   
   
Citizens Ins.
   
27%   
   
New York Central Mutual (NYCM)
   
27%   
   
Preferred    
   
26%   
   
CSAA Insurance Group
   
26%   
   
Travelers    
   
25%   
   
Pemco    
   
25%   
   
Shelter Mutual   
   
25%   
   
Oklahoma Farm Bureau    
   
25%   
   
Farm Bureau of Arkansas   
   
24%   
   
Erie    
   
24%   
   
Memberselect (AAA)
   
24%   
   
Auto Club Family    
   
24%   
   
Grange   
   
24%   
   
Pennsylvania National   
   
23%   
   
Safety Insurance   
   
23%   
   
Country Mutual   
   
23%   
   
Arbella   
   
23%   
   
Mid-Century    
   
23%   
   
Farm Bureau  
   
22%   
   
Automobile Insurance Company of Hartford   
   
22%   
   
Alfa   
   
22%   
   
Encompass   
   
22%   
   
Virginia Farm Bureau    
   
22%   
   
Automobile Club of Southern California
   
22%   
   
Allied Ins.
   
21%   
   
Amco    
   
21%   
   
Fire Insurance Exchange (Farmers)
   
20%   
   
Amica    
   
20%   
   
Patriot Insurance   
   
20%   
   
Milbank Insurance   
   
19%   
   
American Family    
   
19%   
   
Cincinnati Insurance   
   
19%   
   
Kentucky Farm Bureau   
   
19%   

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.

Company% savings
   
MetLife   
   
43%   
   
Auto Club Group
   
30%   
   
Cincinnati Insurance
   
28%   
   
American Family    
   
25%   
   
Texas Farmers    
   
25%   
   
CSAA Insurance Group
   
20%   
   
Memberselect (AAA)
   
20%   
   
Grange    
   
20%   
   
Travelers    
   
19%   
   
Nationwide    
   
19%   
   
Citizens Ins.
   
19%   
   
Farmers    
   
18%   
   
Depositors    
   
17%   
   
Palisades    
   
16%   
   
Farmers P&C
   
15%   
   
Century   
   
14%   
   
Country   
   
13%   
   
Homesite (Am. Family)
   
13%   
   
Fire Ins. Exchange (Farmers)  
   
13%   
   
Garrison    
   
13%   
   
USAA    
   
13%   
   
ASI Lloyds   
   
12%   
   
Acuity    
   
12%   
   
State Auto    
   
12%   

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’s 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.