4 Ways to Save on Homeowner’s Insurance - The Craftsman Blog (2024)

The housing market has exploded since 2021 and house prices are getting out of control. According to US News & World Report the nationwide average home price has increased by 20.6% since 2021 (the largest one year price gain on record!). 2021 also saw a price increase of 18.6% according to WhiteHouse.gov.

With home prices going berserk and interest rates on the rise it may seem that buying a home is unaffordable, but there are still places that you can save on that monthly mortgage payment. Your mortgage payment consists of a few things: principle, interest, taxes, and insurance, often called PITI for short.

Sure, you can negotiate a better selling price as the market has begun to soften, but interest rates and taxes are what they are and there is little you can do there. That leaves insurance costs. How can you save on homeowner’s insurance? Let me show what I have done in the past.

Shop Around

This is by far the simplest way to save money and it requires the least time and effort. If you’re not shopping around for homeowner’s insurance every year you’re missing out on potential deals. Get an insurance broker if you don’t have one or do the shopping yourself and search more than just a few different insurance companies.

I’ve actually bounced back and forth between the same companies in different years on the same property because each year they have different rates and sometimes last year’s more expensive option has become this year’s best value. Shop it around and save on homeowner’s insurance immediately.

Renovate Your 4-Point Inspection

A 4-point inspection covers a few key areas on your house that every insurance company wants to see. The better those items are the less risk your house is and the lower your premium is. I prefer to systematically go through my 4-point inspection and bring the areas that are lacking up to code so I can find better insurers and get better rates.

The items included on every 4-point inspection are below and we’ll dive into each to find savings.

1. Roof
2. Plumbing
3. Electrical
4. HVAC

Roof

If your roof is more than 10-years-old the insurance company is going to see that as an increased risk. It doesn’t matter that you have 30-year shingles. They want the newest and best roof covering available since the roof is such a huge part of protecting your house. If you’ve been putting of replacing that roof now might be the time. Also consider if there are other roof options that might provide better protection and lower insurance rates. Maybe a metal roof or an upgraded shingle is something your insurance company might prefer. Perhaps upgraded underlayment will get a discount too. Check with your insurance and find out what they prefer.

Plumbing

If you’ve got an older home with original plumbing your insurance company may be holding their nose and charging you more than you should be paying. 80-year old plumbing needs to be replaced as do polybutylene pipes of any sort.

New plumbing is not something that you’ll get a discount for at your current insurer, but it will potentially open you up to other insurers who would otherwise pass on you due to the age of those pipes. More competition means better prices for you!

Electrical

There isn’t an insurance company in the world that likes knob and tube wiring, but other electrical issues like aluminum wiring or Federal Pacific Stab-Lok breakers can also disqualify you in an old house. If you have one of these in your electrical system the time is now to upgrade.

Update your wiring to bring it up to current codes and you’ll be introduced to a wealth of insurance companies who are excited to meet you and take your money. The only companies who insure homes with the above electrical issues charge an arm, leg, and sometimes a firstborn for the privilege of covering your house.

HVAC

Heating, Ventilation, & Air Conditioning otherwise know as HVAC to save a heck of a lot of time is the last key component to your house that insurers want to know is up to date. Why? Because some HVAC systems carry extra risk.

Your insurer doesn’t really care if you have a Carrier or a Trane heat pump, but they do care big time if you have an oil heater, wood stove, or some other older form of heating that creates an increase risk of fire for your house.

If your AC fails that’s usually not covered by your insurance, but if your oil heater starts a fire that burns your house down then that is something they’re on the hook for. With that in mind if you have an older HVAC system it might be a good time to update that to a modern system. Not only will you likely save on your energy bill, but you will also be able to get access to new insurers who can give you a lower premium and save on homeowner’s insurance once again.

Wind Mitigation

In a lot of states wind damage from storms is a major expense to insurers. So, many insurers have significant discounts available if you make upgrades to your home to protect it from wind damage. Wind mitigation measures cover a few major areas.

1. Roof deck attachment
2. Roof to wall attachment
3. Roof geometry
4. Secondary water resistance (roof)
5. Opening protection (windows and doors)

I’ve written about the specifics of how you can perform window mitigation upgrades and get big savings on your homeowners insurance in a previous post you can read here. The savings can be huge! I’m talking 50-60% of the total insurance bill if you make multiple improvements.

The process is simple. Make the wind upgrades, get a wind mitigation inspection, submit the inspection to your insurance company and collect your discount. The following states have discounts available for wind mitigation measures:

• Alabama
• Florida
• Georgia
• Louisiana
• Oklahoma
• Mississippi
• North Carolina
• Rhode Island
• South Carolina

Don’t lose heart on that mortgage payment. There are always options out there for you and if you get creative you can save on homeowner’s insurance. You just have to think outside the box.