Are You Paying Too Much for Homeowners Insurance? Strategies To Keep Costs in Line
Homeowners insurance is more than just a mortgage requirement. It offers peace of mind that you won’t be financially devastated if something happens to your home. But many homeowners find that insurance is becoming more stressful than it is reassuring. After all, 37% say they are not confident they can maintain adequate coverage. [1]
And it’s no wonder. Of the four parts of a typical mortgage payment — principal, interest, taxes, and insurance — the cost of insurance has risen the fastest over the last five years. [2]
Homeowners insurance may be unavoidable, but overpaying isn't. Here are four ways to get the best deal, for both short-term payment savings and the potential long-term impact on your finances.
1. Look for Discounts
Accessing discounts can be a quick and easy way to reduce your insurance bill.
Check with your employer, union, alumni association, warehouse club membership, and any professional organizations you belong to. You may be surprised how many have negotiated insurance discounts on behalf of their members.
Additionally, ask for reductions based on:
Bundling home, auto, and/or other policies
Claims-free history
Credit score
Home features, such as a security system, water-leak detection, storm windows, or fire-resistant building materials
2. Avoid the Loyalty Penalty
Homebuyers often look for the best deal at initial purchase then fail to shop again, accepting incremental rate increases as they come. Many years of these small price bumps can create a “loyalty penalty” — a rate far higher than what’s offered to new customers.
By shopping around, you can make sure you’re getting both the coverage and the rate you deserve today.
The best practice is to compare insurers annually, prior to policy renewal or at notice of a rate increase. Major improvements to your home should also trigger an update to your policy and a closer look at the competition.
An independent insurance broker will comparison shop for you. Brokers represent many insurance carriers and can present apples-to-apples comparisons of both costs and coverage across several companies.
A broker can be especially helpful if your coverage has been dropped or you’ve recently filed a big claim. In that case, look for one who specializes in high-risk placements. They’ll know which carriers are willing to work with you.
3. Restructure Your Coverage
Here are two areas where amending your policy could uncover savings.
Pay for dwelling coverage only. Ensure your policy covers only the cost of rebuilding your home, not the combined market value of the land and home.
Increase your deductible. Your deductible is the amount you will pay out of pocket if you file a claim. By agreeing to pay more in the event of a claim later, you can reduce your premium now.
Before you make this change, ask yourself two questions:
First, what is my break-even point? That’s the number of months or years it would take for your savings to equal the increased amount of your deductible.
For example, if you increase your deductible by $1,500 and lower your annual premium by $300, your break-even point will be five years ($1,500 divided by $300).
In this example, if you go five years without filing a claim, you've saved enough in premiums to cover the extra deductible exposure. Only about one in 18 insured homes files a claim each year, so the average homeowner often goes many years without claims. [3] A five-year break-even point could lead to real savings.
Second, do I have the cash I need to pay the new deductible? A good strategy is to set up an emergency fund to cover this. You can deposit your premium savings each year to fund it. Just be sure you have enough cash or credit to cover the full, higher deductible in the meantime.
4. Have an Honest Conversation
While you’re looking to cut your costs, you will not want to hide potential risks from your insurer. Otherwise, you may have problems accessing a payout when you need it. Reveal any liability — such as a pool or trampoline — that could cause future claims. While your premium may increase, the ongoing cost would likely be lower than a future denied claim. And the other savings you’ve found could offset the increase.
It’s easy to simply let your homeowners insurance renew each year. But small, consistent attention to this portion of your monthly payment can add up to significant savings over the life of your mortgage. Ready to take the next step? Visit our branch pages to connect with a Loan Officer near you and explore your home financing options.
Sources:
1. Kin, “Kin’s 2026 Midyear Homeownership Report: Rising costs, a frozen market, and homeowners under pressure,” June 23, 2026.
2. ICE Mortgage Technology, ICE Mortgage Monitor, September 2025.
3. Insurance Information Institute, “Facts + Statistics: Homeowners and Renters Insurance.”
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