6 Ways to Offset Rising Homeowners Insurance Costs
- Encompass CRM
- 4 days ago
- 3 min read
Updated: 3 days ago
If you’re feeling squeezed by rising homeowners insurance costs, you’re not alone. The average property insurance premium has gone up 61% over the last five years,* and that can take a bite out of your budget. According to the ICE Mortgage Monitor report, property insurance costs continue to be the fastest-growing subcomponent of monthly home payments compared with principal, interest, and property taxes.
Unfortunately, the increased frequency of natural disasters means insurance rates aren’t expected to go down anytime soon, but there are steps you can take to manage your premium costs.
1. Shop around.
Check rates with other companies, and then compare those to any discount you may currently be getting for being a long-term customer. Do this annually before your policy renews, and check for savings you can get by bundling your home and auto coverage. Another great way to save is to look for affiliation discounts through your employer, alumni association, professional association, wholesale shopping clubs, or other group memberships.
2. Accept a higher deductible.
Our instincts are to take the lowest deductible, because we worry about out-of-pocket expenses on a claim. But over time, your higher premium cost could add up to more than you would pay on the deductible. Take the highest deductible you can manage, and set aside money that is designated just to cover that amount. This tip also applies to your car insurance, because if you’re bundling coverage, both deductibles impact your overall premium cost.
3. Reduce your risk.
Home improvements that mitigate your risk for damage can lower your rates. These include things like adding stormproof windows or hurricane shutters, creating fire-resistant landscaping, or installing a metal roof. In addition to lowering your premium, these also improve your home’s resistance to damage, which helps reduce your odds of experiencing a claim or loss.
4. Improve your home’s security.
You may be able to get an insurance discount if you install a monitored home security system (not just a doorbell camera linked to your phone). You’ll have to pay a monthly or annual fee to the company that monitors and responds to alarms, but again, you’ll help lower your risk of loss overall.
5. Understand the impact of home improvements.
Anything that increases the value of your house impacts your premium rate. That means the exciting home upgrade you’re looking forward to can also increase your insurance. This includes major changes, like adding a room or installing a pool, as well as minor changes, like remodeling a kitchen or bathroom with higher end materials. Talk to your insurer before making any major changes so you understand potential rate increases.
6. Maintain good credit.
Your credit rating directly impacts your insurance costs. The higher your credit score, the lower your insurance premiums will be. Of course, good credit improves your financial health overall, so consider this a step that has lots of benefits!
What if you've been dropped?
In areas where weather risk is widespread, some insurers are choosing not to renew policies as they expire. If you get a notice of nonrenewal:
Read the notice carefully and make sure you understand why your policy won’t be renewed. Call your insurer if you have any questions.
Start looking for a new insurance plan immediately. Get several quotes to find the best deal.
If needed, improve the condition of your home to demonstrate insurability. This may include things like replacing the roof or addressing structural issues.
If you can’t find a company that will insure you, call your state insurance department to find out about other options, like Fair Access to Insurance Requirements (FAIR) Plans or surplus lines insurers.
*Source: ICE Mortgage Monitor, March 2025.