Home Insurance Discounts
Being familiar with homeowners insurance discounts can help you save a ton of money on your coverage.
Written by
Christine Lacagnina has written thousands of insurance-based articles for TrustedChoice.com by authoring consumable, understandable content.
Reviewed by
Paul Martin is the Director of Education and Development for Myron Steves, one of the largest, most respected insurance wholesalers in the southern U.S.
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.
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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 | |
|---|---|
| New Home | It may come as a surprise that newer homes are actually cheaper to insure because they come without plumbing or wiring issues found in older homes. As a result, if you purchase a brand-new home, you’re likely to get a significant discount on your insurance policy. |
| Companion Policy | If you purchase your auto insurance through the same provider as you have your home insurance coverage, you’re likely to receive another significant discount, on both of your premiums. |
| Burglar Alarm | Theft is a huge concern for insurance companies. If you install a burglar alarm or any kind of security system on your home, you can greatly reduce your risk of break-ins and theft. As a result, your insurance company will likely reward you with a discount. |
| Gated Community | This one also relates to the risk of theft. Living in a gated community will obviously reduce that risk, and insurance companies observe that. If you’re fortunate enough to live in a more secure community, you’re more than likely also fortunate enough to receive a break on your home insurance premium. |
| Fire Extinguisher | Insurance companies’ number one concern when it comes to homes is fire damage. Any measures you take to reduce your risk of fire damage are likely to also reduce your home insurance premium. This includes purchasing a fire extinguisher. |
| Sprinkler | A sprinkler system is similar to the previous example, but is also a much more effective means of preventing fire damage. So, it comes with the potential for receiving a much more significant discount. |
| No-Loss History | Insurance companies have access to your home’s history of insurance claims. If you purchase a home with no claims history, you might just receive a discount on your home insurance premium. |
| Hail Resistant Roof | This one only applies if you live in an area that’s prone to hailstorms. If you’ve upgraded your roof to hail-resistant shingles, your insurance company is likely to reward you with a significant discount. |
| Pool | This one is very specific. If you live in an area far away from all fire departments and you install a pool in your yard, your insurance company is likely to offer you a discount because the fire company now has a water source to draw from in the event of a fire. |
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 | |
|---|---|
| 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" on your property like a trampoline is a great way to save money on your coverage because of the reduced risk of injuries and lawsuits. |
| Multiple homes | This is another type of bundling discount. If you own multiple homes, be sure to insure them with the same company so you can get a bundling discount. |
| Military and veterans | Current service members and veterans receive insurance discounts almost across the board. If you're in this category, or you're the spouse or child of a service member or veteran, this should be one of the first things you tell your agent. |
| Teachers | Carriers may offer teachers discounts, too. This discount may be offered through your union, so be sure to ask. |
| Union or professional association | Professional organizations often cut insurance discount deals for their members. Ask your rep or local leadership for details. |
| Social, religious, and retirement organizations | Just like professional organizations, social organizations cut insurance discount deals, too. Everyone from banks to advocacy groups like AARP offers discounts. Check websites and ask around the groups where you're a member. |
| Loyalty | There are big benefits to sticking with the same carrier. |
| High deductibles | If you agree to pay a higher deductible if you need to make a claim, your premiums will be lower as a result. |
An independent insurance agent can give you even more options for saving money on your home insurance.
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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 | |
|---|---|
| Fire risk | Low fire risk equals lower premiums. This comes down to the materials your home was built with, fire safety measures like sprinklers and fire extinguishers, and how fast firefighters can get to you. |
| Crime risk | If you live in a low-crime area and/or install a security system, you and your belongings are safer. That's cheaper for the insurance company so they can lower your premiums. |
| Location | Different states have different requirements for insurance, which affects premiums. Different areas have different risks and varying access to emergency personnel like police and firefighters. All this affects your premiums. |
| Natural disaster risk | The risk of earthquakes, tornados, wildfires, hurricanes, mudslides, floods, tsunamis, hail, windstorms, and avalanches all go into your home insurance quote. Nowhere is totally safe, but some places (e.g., California or the Gulf Coast) face more of these risks than others, driving insurance costs higher. |
| Replacement cost of the home | Insurance isn't based on what you paid for your home, but how much the insurance company might have to pay if you file a claim. The cheaper your home is to replace, the cheaper your premiums can be. Here are two main factors to keep in mind when it comes to replacement costs: Unique or expensive materials: If the words "priceless" or "irreplaceable" come to mind when you think of countertops, floors, windows, and other neat features of your home, that probably means higher replacement costs and higher premiums, too. Special features: Extras like saunas, pools, carriage houses, and ballrooms all raise replacement costs, and, therefore, your premiums. They can also raise the risk of injury, which can increase your costs. |
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 | |
|---|---|
| USAA Insurance Companies | Known for offering bundling discounts, protective device credits (i.e., if you install security alarms, etc., in your home), claims-free discounts and more, USAA is one of the top-rated homeowners insurance companies. |
| MetLife Insurance | Offering the bundling discount and protective device/safety discount as well as employer group discounts in certain scenarios, MetLife is another carrier that ranks among the top when it comes to homeowners insurance. |
| Allstate Insurance | Their claims-free discount offers customers up to a 20% break on their premium if switching to Allstate from another carrier without a recent claim. Allstate also offers welcome and loyalty discounts of up to 10%. Additionally, 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.
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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.