What to Do if You Can’t Afford Homeowners Insurance

1. Raise Your Deductible

The homeowners insurance deductible is the amount you pay out of pocket before your insurance coverage kicks in. It may be a flat rate or a percentage of your home's insured value.

Raising your deductible can lower your insurance rate and make your premiums more affordable. This is because your insurer takes on less risk when you agree to cover more of the upfront. If you increase your deductible, make sure you afford the higher out-of-pocket cost. You'll be responsible for that amount if you have to make a claim.

Tip: Avoid filing claims for small, inexpensive repairs if you can. Too many claims can trigger premium hikes or even policy nonrenewals.

2. Shop Around

Insurance companies price risk differently, so rates can vary by company. Even if you're happy with your current provider, it's smart to shop around periodically.

Get quotes from multiple companies to compare your options. You may be able to find lower rates from another company without sacrificing coverage. Before you switch insurers, check reviews and customer satisfaction ratings to be sure you're choosing a reputable company with a reliable claims process.

3. Look for Discounts

If you prefer to stay with your current company, call and ask about ways to save. You may qualify for a discount by bundling your home and auto insurance policy under the same insurer. Bundling also offers convenience since you can make a single payment and access your policies in the same place. If you've been with the same company for several years, ask whether they offer a loyalty or long-term policy discount.

You may be able to save money by making improvements to your home. Home safety upgrades, for example, may lead to lower premiums by lowering your risk of burglary and theft.

4. Seek Financial Assistance

Looking into your state's Fair Access to Insurance Requirements (FAIR) plans can be another option, particularly if you've been turned down for insurance or your premiums are unaffordable because of your home's risk level. These programs are designed for high-risk properties, but coverage may be more limited compared to private insurance.

5. Improve Your Credit

A lower credit score can lead to higher premiums in many states where insurance companies are allowed to use credit-based insurance scores for insurance pricing. This score reflects the likelihood that you may file a claim and is based on the same information used to calculate your traditional credit score.

You can take steps to improve your credit score by paying your bills on time every month, reducing credit card balances and avoiding applications for new credit. Even small improvements to your credit score can lead to savings.

Learn more: How to Improve Your Credit Score

6. Review Your Coverage

You may be paying for more coverage than you need. Check to see that your policy is based on the replacement value instead of the market value, which is higher because it also includes the land.

Check your policy for coverage you don't need, like optional riders or supplemental coverage. Lowering limits and removing coverages you don't need may make your insurance more affordable. However, avoid removing coverage you actually need since it can put you at risk of out-of-pocket costs after a loss.

Learn more: How Much Homeowners Insurance Do You Need?

7. Protect Your Home Against Disasters

Investing in a safer home can protect your home and lower your insurance premium. Depending on where you live, that might include:

• Installing hurricane shutters
• Reinforcing your roof against hail
• Modernizing heating and plumbing systems
• Retrofitting to handle earthquakes

These kinds of changes lower the cost to insure your property. Be sure to update your insurance provider so these improvements are factored into your rate.

Tip: A home equity loan can provide needed funds for home upgrades. Before borrowing, compare project costs to potential insurance savings and any added home value to be sure the investment pays off.

8. Cut Expenses

If you've explored all your options and can't get your insurance policy any lower, you may have to free up money elsewhere. Review your budget to look for nonessential expenses you can pause or eliminate. This may include things like streaming services, dining out or unused subscriptions.

Though it may not be the ideal option, reducing your monthly spending can ensure continuous coverage. A lapse can make it hard to find affordable insurance later.

Frequently Asked Questions

The Bottom Line

Since your home is one of your biggest investments, maintaining insurance is critical to protecting your financial stability. If your homeowners insurance has become unaffordable, you still have options. It's important to act before you miss a payment. Start by exploring ways to lower your premium, like raising your deductible, shopping around or improving your credit. If you need to make budget cuts, consider using Experian to help negotiate and lower your bills.