Homeowners across the nation are seeing rising home insurance costs. Consumer Reports says it’s normal for these rates to go up about 5% every year, but they went up an average of 12% in 2023 and then almost 7% in the first half of 2024.
And those are average figures. Some regions are experiencing more significant increases based on location. Homeowners in Florida (like yours truly) have seen insurance premiums jump 60% over the last few years. With the ever-increasing cost of home insurance, many homeowners are having a hard time making monthly insurance payments on top of mortgage payments, taxes, utilities and other bills.
To make matters worse, some insurers are pulling out of high-risk areas altogether, often citing wildfire, hurricane or flood risks, leaving homeowners scrambling to find new coverage. This means homeowners not only have to deal with rising costs but also the challenge of shopping for coverage in a shrinking market.
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Whether you're searching for new coverage or looking for ways to cut costs, now might be the perfect time to explore your options. Here’s your guide to shopping for home insurance and making the switch.
1. Talk to your insurance agent first to explore your options
If you are currently paying a mortgage, your lender requires you to have home insurance on your property. Because of that, you’ll want to start talking to the person who knows the most about your current home insurance policy: your agent.
Your home insurance agent knows the most about your policy, coverage, available options and ways to save. There’s a chance your agent can get quotes from multiple companies and can do much of the heavy lifting for you. Your agent knows how disaster-prone your house is. They also know what types of coverage you need to stay protected.
Insurance agents should give you solid suggestions, plus the pros and cons of each potential move. Whether you’re changing insurance companies, raising your deductible or bundling, your agent knows all the intricacies of how to save on home insurance.
2. Check your current home insurance policy for savings and coverage gaps
It’s essential to review your current policy — not just to find ways to save money, but also to ensure you have the coverage you need, especially if your insurer has stopped insuring homes in your area. Understanding your options can help you secure affordable protection and avoid gaps in coverage.
For instance, see if you can raise your deductible to lower your premiums. Your deductible is what you pay in the event of a loss or a claim before homeowners insurance kicks in. The higher your deductible, the lower your premium. But it also means more out-of-pocket costs when disaster strikes.
You don’t have to make a drastic change, but do the math with your insurance agent to see what raising your deductible by $500, $1,000 or even $2,000 would do to your premium costs.
When reviewing your current policy, check to make sure you’re up-to-date on home security and disaster resistance. These steps can also lower your insurance premiums.
Verify that your current policy has your most recent credit score and history. Many states use credit-based insurance scoring, where your score impacts your pricing. The higher your score, the lower your premiums. Poor credit could mean you pay premiums higher than those with excellent credit. If your credit score has increased, you may want to check to see if you’re eligible for a good credit discount.
3. Ask other homeowners about their home insurance experiences and recommendations
When you bought your home, friends and family may have recommended the home insurance company they use. It’s normal to go with these suggestions, especially from people you trust.
Now that you’ve owned your home for a while, reach out to others to gauge their experiences. Chat with neighbors when you’re walking your dog or mowing the lawn.
Use your community as a guide to determine how other homeowners navigate the same home insurance dilemmas. You might find that many have already gone through what you have and have resources you haven’t considered yet.
You can also compare home insurance coverage and rates using our tool, in partnership with Bankrate, below.
4. Bundle your home insurance with other policies to save money
If you can bundle your home insurance with other policies, like auto insurance, you may qualify for a discount. Many major insurers — including Allstate, GEICO, State Farm, USAA and Nationwide — offer savings for bundling. Be sure to check with your local insurance provider as well, as they may have similar discounts.
Keep in mind that not all insurers offer home insurance in every state. For example, in my home state of Florida, I can’t bundle my home and auto insurance. Although I have a major auto insurance provider, the company doesn’t offer home insurance in my area. While this option may work for some folks, it might not work for everyone, so don’t be afraid to pivot if it doesn’t work out for you.
5. Consider long-term home insurance costs when evaluating where to live
Buying a home involves more than just the purchase price. It also includes ongoing expenses like taxes, utilities, and of course, home insurance. In Florida, homeowners pay an average of $11,000 per year for insurance — almost 12 times what residents in Vermont pay.
Do the total math of owning your home and include the costs of everything — your mortgage, insurance, taxes and overall cost of living. Comparing these expenses to other areas can help you determine whether relocating to a more affordable region is a viable option.
Keep in mind the full financial and personal impact of making a major move, including:
- Moving expenses, including hiring movers or renting a truck.
- Upfront costs, such as closing costs on a new home or vehicle registration fees in a new state.
- Job and career prospects for you and your partner, both short- and long-term.
- Family considerations, proximity to loved ones and overall lifestyle changes.
- Long-term care needs, whether for aging family members or future planning.
- Healthcare access and costs, including insurance coverage and availability of medical providers.
Even though a move can be a big change for you and your family at any stage in your life, it could save you a lot of money in the long run. Try to run the numbers to see if it’s financially feasible and what it would mean for your family.
The bottom line
Shopping for home insurance can be a daunting task, especially when coverage is becoming harder to find. With insurers pulling out of high-risk areas and canceling policies, many homeowners are left scrambling for new coverage — often at significantly higher prices.
If you’re facing this challenge, switching your home insurance provider is critical to protecting one of your largest assets.
Start by reviewing your current policy to understand your coverage and costs, then reach out to your insurance agent to explore your options. Don’t stop there; get quotes from other insurers, including regional and specialty providers, as they may offer better coverage at a lower price.
By staying proactive and shopping around, you can increase your chances of finding the right coverage at the best possible price.
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