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If you want to hunt down the best value for your insurance dollar, comparison shopping is a good way to start. Companies don’t judge you and your property identically, so you may get a more favorable price from one company than from another. Just make sure you’re comparing coverage apples to apples.
If you’re worried about losing your standing as a longtime customer, you don’t necessarily need to be. While your current insurer may provide a 5 or 10 percent loyalty discount, staying put may also be sending it the message that overall price hikes won’t send you running to a competitor. Just 13 percent of Consumer Reports members in a recent survey said they regularly shop for new coverage. But among the 7,075 who did switch to a new carrier within the five-year period covered by our survey, 39 percent said they did so because they got a better price.
Keep in mind that in this inflationary period, it’s key to establish the right replacement cost for your home so you’ll be covered in the event it gets destroyed. For that reason, Zawacki favors using a local, independent agent or broker who sells policies from several insurance companies vs. an online vendor. These professionals can go over how the different companies have determined the replacement cost of your home, and they also may recommend policy add-ons that can help your coverage keep up with inflation. (Find an agent through Trusted Choice, which is affiliated with numerous such companies.)
If you’d rather hunt for coverage online, consider websites such as Insure.com, NetQuote, SelectQuote, and TheZebra, which provide initial quotes from a variety of insurers. Also check with your state insurance department, which may publish rate comparisons. Floridians, for instance, can go to Florida’s Office of Insurance Regulation; Californians, to the California Department of Insurance.
CR members can consult Consumer Reports homeowners insurance ratings to identify companies that best satisfied the 59,670 members who responded to our survey. We judge carriers on price, breadth of coverage, non-claims customer service, and other factors. We also rate them on claims handling, including how satisfied members are with the dollar amount they receive.
Use These Other Money-Saving Tactics
The first quote you get from an insurer may not be what you ultimately pay, says Collins of the APCIA. “You may start out with a higher quote,” she says, “but when you show the steps you’ve taken to mitigate risks, it can moderate the cost.”
These strategies can help:
Bundle coverage. Purchasing your homeowners and auto coverage from the same company can provide savings of up to 30 percent overall. You could save more, too, if you bundle your boat or motorcycle. “Bundling insurance policies also can simplify your bill paying and record-keeping,” says Loretta Worters, a spokesperson for the Insurance Information Institute.
Keep your deductible high. Higher deductibles equal lower premiums. Going to a $1,000 deductible from $500, for instance, can shave your premium by 25 percent, the III says. And going from $500 to $2,500 potentially saves even more.
Clean up your credit. Insurers in 46 states can use what’s called a credit-based insurance score in their pricing of homeowners insurance premiums. They can also check your score regularly and use it in their renewal pricing. An analysis by PolicyGenius found that poor credit can generate a premium twice as high as good credit. To improve your odds, don’t take on too much credit card debt in the months before shopping, and pay your bills on time. Check your credit reports with annualcreditreport.com regularly to identify errors and correct them. And ask the insurer what impact your credit score is having on your premium. “In theory, the insurer should tell you the source of the score—Lexis-Nexis, Experian, for instance—so you can review it,” says Chuck Bell, programs director for advocacy at Consumer Reports. (CR has argued against the use of credit in insurance pricing, and using credit scores for homeowners pricing isn’t allowed in California, Maryland, Massachusetts, or Michigan.)
Landscape with fire in mind. Cutting back dry brush around dwellings and outbuildings in a fire-prone area can earn you a 5 percent break on your premium. (Worters says it’s rare to see this discount in wildfire-prone California.)
