Trim Your Home Insurance Premium

Whether you stay with your current insurer or switch, you can lower your rate without sacrificing coverage.

- Miriam Cross

Car insurance companies are falling all over themselves to grab your attention with clever TV ads, giving the impression that lowering your premium is as easy as picking up the phone. But when it comes to homeowners insurance? Crickets.

Yes, it’s pretty quiet on the home insurance front. For years, insurance companies have played a game of chicken with policy holders who dare to use their insurance. They’ve threatened to raise premiums—or refuse to renew your policy—when you make too many claims. Just one claim can raise your premium if it’s the “wrong” kind—say, for plumbing leaks. Even many homeowners with no claims on their record are too intimidated to shop for a new carrier.

Homeowners insurance rates typically rise a bit each year to keep up with inflation. When you file a claim— especially for an event unrelated to a widespread catastrophe, such as a hurricane or wildfire—you can expect your rate to go up even more for several years. Having one claim unrelated to a widespread catastrophe within the past three years on your record can knock you out of the running for many insurers; two claims in that time frame make it nearly impossible to switch, says Spencer Houldin, president of Ericson Insurance Advisors, in Washington Depot, Conn.

File multiple claims and you risk having your current insurer drop you when your policy comes up for renewal. In that case, you’ll have to find coverage through a more expensive “surplus lines carrier,” such as Lloyd’s of London, which specializes in higher risks that standard insurers won’t touch.