6 Strategies to Save on Home Insurance Premiums In Arizona

by Michelle Quackenbush

The past few years have seen an unprecedented surge in devastating climate and weather events in the United States, from wildfires to floods. In 2023 alone, 28 individual weather-related disasters caused at least $1 billion in damages each. These events have led to a significant rise in home insurance claims; experts predict this trend will continue. The unpredictability of future events underscores the need for preparedness.

Consequently, home insurance rates have surged: In 2024, Bankrate reports, premiums are already up an average of 23%, following double-digit increases the previous year. In disaster-prone regions, the situation is even more challenging. Some insurers have pulled out of risky areas entirely, and many of those that still offer policies in high-risk areas have doubled or even tripled their premiums.

For most homeowners, comprehensive home insurance coverage is crucial for financial security, but massive rate increases can turn a once-affordable home into a financial burden and pose a serious challenge for sellers. A home insurance policy is typically required to get a mortgage, and in some hard-hit regions, we're seeing sales fall through or homes sit on the market because insurance policies are unattainable or too expensive.

But don't panic! While these broader trends may be out of your control, there's still plenty you can do to save. Here are our top six strategies for slashing insurance premiums while maintaining the protection you need.

1. SHOP AROUND

Getting multiple quotes is a smart move for many major purchases, including home insurance. We recommend reviewing at least three estimates before you commit to a policy. You can get quotes by contacting insurers directly or working with an independent insurance broker like NerdWallet. You'll need to provide detailed information about the property you're insuring and your claims history.

Make sure you read policies carefully before you choose. Sometimes, a policy can look like a better deal at first glance but turn out to have essential coverage gaps. Be sure to consider how much the policy will pay out to repair or replace your home and review caps on personal possessions and liability claims. It is also wise to read policyholder reviews (Trustpilot is an excellent place to start) and ratings published by organizations like the Better Business Bureau and J.D. Power.

If you need help choosing the right policy, please contact us for a list of trusted insurance professionals.

2. INCREASE YOUR DEDUCTIBLE

The size of your deductible- the amount you pay before your insurance coverage kicks in on a claim- is a significant factor in your insurance cost.

A low deductible, such as $500, comes with higher premiums, while a higher deductible, like $2,500 or even $5,000, costs less monthly. In some cases, you may be able to customize your coverage further by defining a different deductible for certain kinds of claims, such as those caused by storms or natural disasters.

If you are confident that you have enough savings to cover the initial outlay if needed, choosing a higher deductible can help you save significantly over the long term. According to NerdWallet, raising your deductible from $1,000 to $2,500, for example, could save you an average of 11% each year.

3. BUNDLE MULTIPLE TYPES OF INSURANCE

Insurers want to get as much of your business as possible, so most offer significant discounts if you bundle your home and auto insurance, meaning that you bundle two policies together. With some insurers, you can get even higher savings by bundling more than home and auto—RV, boat, jewelry, and life insurance are potential options to consider.

According to US News and World Report, insurers typically offer customers who bundle home and auto insurance 10-25% savings on monthly premiums. This approach also has other advantages: It cuts down on your paperwork, and in some cases, like if a storm damages both your home and car-you may be able to pay just one deductible instead of two when you file a claim.

However, before you sign on the dotted line, remember strategy #1 and be sure to shop around. In some cases, bundled coverage offers everything you need.

4. ASK ABOUT AVAILABLE DISCOUNTS

Did you know that being a nonsmoker might qualify you for a home insurance discount? Some insurers offer surprising incentives for policyholders with a statistically lower risk of filing a claim. In the case of nonsmokers, that is because of decreased home fire risk.

Many carriers also offer discounts to military-affiliated families, homeowners in certain professions, such as teachers or engineers, or recent homebuyers. Sometimes, according to MarketWatch, you can save by opting for paperless billing or paying your premiums for an entire year upfront.

Since available discounts vary significantly between insurers, the best strategy is to ask a representative for the complete list of available discounts so you can see what cost savings might be available to you.

5. AVOID MAKING SMALL CLAIMS

Are you worried that your premiums will rise significantly in the future? Try to avoid claiming unless truly necessary. Many insurers offer discounted rates to policyholders who go a certain number of years without filing a claim, and filing multiple claims typically results in significant increases. If you file too many, you may even risk nonrenewal of your policy.

Since the cost of even a tiny premium increase can add up significantly over time, if you have minor damage to your home -- for example, if a few shingles blew off your roof in a windstorm -- it may be a wiser long-term financial decision to pay out of pocket insted of filing a claim according to BankRate. If the repair cost is less than your deductible, it never makes sense to file, and if it is just slightly above your deductible. It is also unusually best to pay for the repairs yourself. Additionally, always be sure to review your policy before you make a claim. Even claims that are denied can count against you. So, it is not worth filing if the damage is clearly excluded from coverage.

If you find yourself in this situation, feel free to reach out for a list of reasonably-priced professionals who can help with the home repairs.

6. BE STRATEGIC ABOUT HOME IMPROVEMENTS

Insurance premiums alone may not be the deciding factor for a home improvement project, but knowing how renovations could impact your rates is essential - for better or worse.

For example, according to BankRate, some upgrades and repairs can reduce your premiums by making your home safer or less prone to certain types of damage. These include:

Upgrading your electrical system
Updating your plumbing
Installing a monitored security system
Adding a fire sprinkler system
Replacing the roof

On the other hand, some upgrades can raise premiums significantly, either because they increase the value of your home (and therefore the cost to replace it) or because they pose a hazard. These include:

Installing a swimming pool or other water features
Building an extension or expanding your living space
Upgrading materials, like flooring or countertops
Adding a fireplace or woodstove

Whether or not your planned renovations are on either of these lists, it is wise to inform your insurer about the changes you make to your home—otherwise, you may risk gaps in coverage. You are always welcome to check with us before you begin any home improvement project to determine how it could impact your home's value and resale potential.

BOTTOMLINE: Protect Your Investment Without Sacrificing Enjoyment Of Your Home.

Getting the coverage you need for financial security without overpaying can be tricky, especially in today's environment. Remember that while finding the best deal you can is essential, home insurance is not an area to skimp on.

For advice on your specific risks and the type of coverage you need, we recommend consulting with a knowledgeable insurance professional. We are happy to connect you with a trusted adviser in our network. If you are considering a home renovation, feel free to reach out for a free consultation on how it might affect your property value (and your premiums).

The above is an opinion and is for informational purposes only. It is not intended to be financial, legal, insurance, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

6 Strategies to Save on Home Insurance Premiums In Arizona

by Michelle Quackenbush

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