Homeowners Insurance Costs Are Soaring: 5 Ways to Fight Back

The other day, one of my friends who lives on a small, fixed income revealed something shocking: She recently was forced to drop her homeowners insurance. She simply could no longer afford it.

She’s not alone. According to a recent report from S&P Global Market Intelligence, the average rise in homeowners’ premiums nationwide was 8.8% last year. But in many states, it’s much worse.

In Arizona, as of September 1, 2023 rates from the largest carriers have risen by a weighted average of 18.4%. In Texas and Illinois, the increase is more than 16%. Arkansas, Louisiana, Tennessee, and Utah have seen rates rise by double digits.

Here in Florida, rates are rising by as much as 40%.

These increases are hard enough when you have a decent income. For those on lower or fixed incomes, increases like these can literally price you out of your home. And for those with mortgages, you’re required to have coverage.

What’s a homeowner to do? We can’t control insurance companies or state regulators, but that doesn’t mean we’re helpless. Here are a handful of ideas to fight back against these soaring rates.

1. Shop around

Your insurance company knows you. They know you hate dealing with insurance. They know that once they have you, you’re likely to stand like a deer in the headlights, even as they send you bigger and bigger bills.

Maybe you assume that there’s nothing you can do, since companies all charge about the same anyway. That’s wrong. Rates often vary widely among insurance companies. So if you want to save money, shopping is absolutely, positively step one.

As soon as you’re finished with this article, take a few minutes and hit an insurance shopping site. One you can try: Policygenius.

Pull out your policy, and spend a few minutes. There are only two possibilities. Either you’re going to find you can save a ton of money, or you’re going to find that the deal you already have is the best you can get. So you either find you can save, or you win peace of mind.

Either way, you’re better off than you are now.

2. Raise your deductible

If you had a $500 loss on your home, would you file a claim with your insurance company? It’s probably not a good idea, since claims can result in higher rates. (More on that below.)

So here’s the question: If you wouldn’t report a $500 claim, why do you have a $500 deductible?

The more of a loss you’re willing to pay, the less your insurance will cost. According to the Insurance Information Institute, “if you can afford to raise your deductible to $1,000, you may save as much as 25%.”

3. Bundle your insurance

When shopping for the best rates on homeowner’s insurance, don’t forget to contact your car insurance company. Some insurers offer a 5% to 15% discount to clients who have multiple policies with them, according to the Insurance Information Institute.

There’s no guarantee your insurer makes this offer, but it’s worth asking. And while you’re at it…

4. Talk to your company

Sometimes the best way to save is also the simplest. Try simply asking your insurer for a better rate. The Insurance Information Institute reports some companies will offer a 5% discount to customers who have been with them for three to five years, and up to 10% for customers who’ve been with them for longer periods.

And while you’re talking, ask your insurance company about ways to reduce your premiums. Updating utilities, adding storm shutters and installing other weather protection can go a long way toward saving you insurance costs. They’re the ones who know how to reduce your costs. Ask them.

5. File claims judiciously

Obviously, you buy homeowner’s insurance so you’re protected. But that doesn’t mean you should routinely file claims. “There’s a significant correlation between claims that are made and future additional likelihood of claims being made,” Chris Hackett, senior director of personal lines policy at the Property Casualty Insurers Association of America, told Insurance.com.

In short, use insurance as needed, but try not to overdo it.

Bonus: Don’t stop with your home

While you’re at it, check another ridiculously expensive and ever-rising premium: your car insurance.

Shopping car insurance used to be hard; now, not so much. You can check out sites like Provide Insurance and compare quotes from more than 175 different carriers in minutes.

Bottom line? Insurance is becoming not just expensive, but unmanageable. Spend a few minutes and see if you can shave hundreds, even thousands, off your bill.

What’s your experience with homeowner’s or other insurance? Any surprise price increases or ideas to save? Share with us in comments below or on our Facebook page.