Home Value Guides

You Could Be Overpaying for Homeowners Insurance: 7 Ways to Lower Your Premium

If you’ve renewed the same homeowners policy for years without comparing it, there’s a real chance you’re paying more than you need to. ICE’s September 2026 Mortgage Monitor found that homeowners who switched insurance carriers over the past year cut their premiums by 6.6% on average, while those who stayed with their insurer saw premiums rise 10.4%. The gap worked out to about $440 a year. Switching isn’t the only lever, and it won’t save money for everyone, but shopping your coverage, right-sizing it, and asking for the discounts you qualify for are the most reliable ways to lower a homeowners insurance premium.

The cost of staying put

The most telling detail in ICE’s data is what switchers did not give up. Their coverage limits actually rose 7.3% and their deductibles fell 1.4%. In other words, the average switcher didn’t save by buying a thinner policy. They found a carrier that priced the same risk differently. ICE says the 6.6% average cut was the largest it has recorded since it began tracking switching in 2013.

That doesn’t mean every homeowner will find a cheaper policy. These are averages across mortgage holders nationwide, and people who switched were more likely to be the ones who found a better deal. Availability and pricing vary widely by state, ZIP code, and property. Some homeowners will shop and discover their current policy is already competitive. That’s still worth knowing.

Why homeowners insurance keeps getting more expensive

Premiums have climbed for several reasons at once. The biggest, according to ICE, is coverage limits. Rebuilding a home costs more than it did a few years ago because labor and materials are more expensive, so policies now cover larger dollar amounts. Rising coverage limits explain roughly two-thirds of the recent increase. The price per $1,000 of coverage rose about 3% over the past year, which reflects insurers’ higher costs from storms, wildfires, and claims.

There is some relief in the trend. Annual growth slowed to 8.7% in the second quarter of 2026, down from a peak of 15.1% at the end of 2024. Costs are still rising, just more slowly. Some markets are rising much faster than the national average, though, and they aren’t all coastal or wildfire areas.

Annual change in average insurance payment for mortgage holders, Q2 2026

Greenville, SC

+15.8%

Honolulu

+14.7%

Minneapolis

+13.1%

Sacramento

~+12%

San Diego

~+12%

U.S. average

+8.7%

Source: ICE Mortgage Monitor, September 2026. Sacramento and San Diego reported as roughly 12%. Miami and New Orleans, the two most expensive markets, saw some of the smallest increases.

Your own premium is built from a mix of factors. The biggest are where the home is (and its exposure to wildfire, wind, hail, or flooding), the estimated cost to rebuild it, the age and material of the roof, the condition of plumbing and electrical systems, your claims history, the deductible you choose, and any optional coverage you add. In most states, insurers can also use a credit-based insurance score. Two neighbors with similar homes can pay very different amounts because insurers weigh these factors differently, which is exactly why comparing carriers can pay off.

7 ways to lower your homeowners insurance premium

1. Compare quotes before every renewal

Start 45 to 60 days before your policy renews. Get at least three quotes, and make sure each one prices the same dwelling coverage, deductible, and endorsements, or you’re comparing different products. An independent insurance agent or broker can quote several carriers at once. If you pay through your mortgage escrow account, tell your loan servicer when you switch, and don’t cancel the old policy until the new one is in force. A lapse in coverage can violate your mortgage terms and lead to expensive lender-placed insurance.

2. Make sure dwelling coverage matches rebuild cost, not market value

Your dwelling coverage should reflect what it would cost to rebuild the house, not what it would sell for. Market value includes the land, which doesn’t burn down. (Here’s how market value estimates are calculated.) In some areas, rebuild cost is far below market value. In others, especially older homes with custom features, it can be higher. Ask your insurer how it calculated your rebuild cost and check that the square footage, number of bathrooms, and finish level are correct. Errors here can mean you’re paying for coverage you don’t need, or worse, that you’re underinsured.

3. Run the math on a higher deductible

Raising your deductible lowers your premium because you’re agreeing to cover more of a loss yourself. The right question is how long it would take to break even. If moving from a $1,000 to a $2,500 deductible saves $200 a year, you’d need more than seven claim-free years to come out ahead on a single claim. Only choose a deductible you could pay from savings tomorrow. In coastal and some wildfire areas, watch for percentage deductibles, which are calculated from your coverage amount and can be much larger than they sound.

4. Price bundles both ways

Bundling home and auto with one company often comes with a discount, but a bundle isn’t automatically the cheapest option. Ask for the bundled price and the standalone home price, then compare that against the best standalone quotes from other insurers. Sometimes the best home insurer and the best auto insurer are different companies.

5. Ask for every discount you qualify for

Insurers don’t always apply discounts automatically. Common ones include monitored security or fire alarms, water leak sensors or automatic shutoff valves, a newer roof, a claims-free history, paying the annual premium in full, and loyalty or membership programs. In states with wildfire or hurricane mitigation programs, documented home-hardening work can qualify for specific discounts. Ask your agent for the full list and what proof is required.

6. Make improvements that lower risk

Some home projects reduce what insurers expect to pay out, and premiums can follow. Replacing an aging roof is the biggest one in many markets. Updating old electrical panels, replacing failing water heaters or supply lines, and adding impact-resistant or fire-resistant materials can also help. Before spending money, ask your insurer how much a specific project would change your premium. Many of these upgrades also help when it’s time to sell. See which renovations actually increase home value.

7. Review your coverage every year

A yearly review catches changes that affect price. You may have paid off a mortgage, finished a remodel, sold expensive items, added a pool, or started working from home. Check whether optional endorsements still make sense and whether your personal property coverage is realistic. It also pays to think carefully before filing small claims, since claims history affects your future pricing. That doesn’t mean skipping legitimate claims. Insurance exists for real losses.

Why the cheapest policy isn't always the best deal

Two policies with the same dwelling limit can behave very differently after a loss. A lower quote might settle roof damage at actual cash value (replacement cost minus depreciation) instead of full replacement cost. It might exclude water backup from sewers and drains, cap additional living expenses if you have to move out during repairs, or carry a separate, higher deductible for wind or hail.

Here’s how that plays out. Say one policy is $300 a year cheaper but pays for a 15-year-old roof at depreciated value. If a hailstorm destroys that roof, the difference between replacement cost and actual cash value could easily exceed a decade of savings. Before switching, compare the declarations pages side by side, read the exclusions, and check the insurer’s financial strength rating and complaint record with your state insurance department.

How insurance costs affect affordability and home values

Homeowners insurance is part of the monthly payment lenders use to decide how much a buyer can borrow. That makes it part of what buyers can afford to pay for a home, not just a cost of owning one.

At Freddie Mac’s October 8, 2026 average 30-year rate of 7.40%, a $209 monthly insurance bill takes up the same room in a buyer’s budget as roughly $30,000 of mortgage principal. The increase since early 2020, about $90 a month, is equal to roughly $13,000 of borrowing power. For a buyer at the top of their budget, that can be the difference between qualifying for a home and not. Higher mortgage rates make every extra dollar of monthly cost bigger in loan terms. We walk through that math in what 7% mortgage rates mean for your home’s value.

The burden is very uneven. ICE found insurance takes up 24.3% of the average mortgage payment in New Orleans but just 4.3% in San Jose. In places where insurance is unusually expensive or hard to get, buyers have less left over for the price of the home itself. Over time, that can weigh on what buyers are willing to pay, especially for homes that are costly to insure. This is a general affordability effect, not a prediction for any one home. Location, condition, and local demand still drive value.

For sellers, insurability is becoming part of a home’s appeal. A newer roof, documented updates, or wildfire hardening can make a home cheaper to insure, which can make it more attractive to buyers. For buyers, getting an insurance quote early, ideally during the inspection period, avoids an expensive surprise before closing.

Special considerations in wildfire-prone areas, including California

In parts of California and other wildfire-exposed regions, the main problem is often finding coverage at all, not just price. As private insurers have limited new policies or declined to renew in high-risk areas, more homeowners have turned to the California FAIR Plan, the state’s insurer of last resort. The FAIR Plan had 696,562 policies in force as of June 2026, up 157% since September 2022. State regulators approved a 29.1% average rate increase for its dwelling policies, which applies at renewals starting October 15, 2026. ICE also found that Sacramento and San Diego saw insurance costs rise about 12% over the past year.

The FAIR Plan is designed as a basic fire policy. Many homeowners pair it with a separate “difference in conditions” policy to cover things like theft, water damage, and liability. That means comparing total cost, not just one premium.

If you live in a wildfire area:

• Start early. Begin shopping 60 to 90 days before renewal, especially if you’ve received a non-renewal notice.
• Use a broker who works in your area. They often know which carriers are still writing policies in specific ZIP codes.
• Document mitigation work. California’s Safer from Wildfires program lists actions that qualify for insurance discounts, including a Class A fire-rated roof, ember-resistant vents, a five-foot noncombustible zone around the home, enclosed eaves, upgraded windows, and cleared defensible space. Keep photos and receipts.
• Check back with private carriers. If you moved to the FAIR Plan, re-shop private coverage at each renewal. Your options may change as the market shifts.

Frequently asked questions

Sources, current as of October 15, 2026. General educational information, not insurance, financial, or legal advice. Coverage, availability, and pricing vary by state, insurer, and property: ICE Mortgage Monitor, September 2026 · ICE press release: Property Insurance Costs Rise 8.7% Annually (Sept. 10, 2026) · California FAIR Plan key statistics · California Department of Insurance rate filing approvals (2026) · California Department of Insurance: Safer from Wildfires · Freddie Mac Primary Mortgage Market Survey