Cutting the Cost of Homeowners Insurance: Expert Tips and Tricks

According to Quadrant Data Sources, the average cost of homeowners insurance nationwide is $1,787. However, depending on the state in which you live, rates may be much higher or much lower. For example, the average annual premium in Hawaii is $372, leaving more money in Hawaiians' bank accounts. In Nebraska, it's a whopping $4,398.

No matter where you live, though, experts offer these tips for trimming your insurance premiums.

Shop around

Unless you feel strongly that you owe your loyalty to a specific home insurance company, shop around. In fact, it can pay to shop annually. As mentioned, the average annual rate for homeowners insurance in Nebraska is $4,398, but that average includes a wide range of rates. USAA rates average $5,401, and Allstate rates average $4,369. On the other end of the scale, Farmers' rates come in at $2,786, and American Family offers an average annual rate of $2,783.

You may be a policyholder with a single company for 10, 20, or 30 years, but if you never shop around to see if there's a better policy out there for you, you might be spending too much.

Bundle policies

Bundling your different policies is one of the simplest ways to lower your rates. As a reminder, the average cost of homeowners insurance nationwide is $1,787. When a policyholder chooses to bundle their homeowners coverage with auto coverage, the average rate drops to $1,455. That's a 19.5% savings.

If you're not already bundling, ask your insurance agent how much you can save.

Raise your deductible

A homeowners insurance deductible is the amount you're expected to pay before your insurance company kicks in the rest. Let's say you have a small kitchen fire that's going to cost $10,000 to repair. If you carry a $1,000 deductible, you'll pay the first $1,000, and your insurer will pay the remaining $9,000.

The tricky bit is this: The lower your deductible, the higher your insurance premiums. By raising your deductible from $1,000 to $1,500 or $2,000, the price of your policy should go down. If you decide to raise your deductible, make sure to put the funds you'll need to cover it in a savings account that you can easily access in case of a claim.

Watch your credit score

If you wonder what your credit score has to do with homeowners insurance, it's this: Insurers rely on studies showing that people with low credit scores tend to make the most insurance claims. To hedge their bets, insurance companies raise the rates on those homeowners.

If your credit score is poor, your best bet is to take steps to give your score a boost. It won't be easy and doesn't happen overnight, but millions of people have done it. The payoff is certainly worth it. According to Quadrant Data, pushing your credit score from poor to average can cut up to 59% off the cost of your homeowners policy.

Upgrade safety features

The safer your home, the less likely it is that you'll make a large insurance claim. For example, national averages show that you can slash rates by:

• Installing smoke alarms (6%)
• Installing a burglar alarm (8%)
• Having a fire extinguisher (6%)
• Installing a sprinkler system (10%)

Deadbolt locks, hurricane shutters, upgraded roofs, and upgraded heating and plumbing systems are also money savers.

According to experts, there are plenty of ways to keep the cost of premiums down. As you shop around, make sure to ask about discounts. You may just find that you qualify for more than one and can cut your rates even more.