Everyone wants to pay less for insurance. We’ve been conditioned year after year by marketing companies to do just that.
But there’s a big difference between lowering your insurance premium and simply buying less insurance.
Dropping liability limits, removing important coverage, or underinsuring your home might save money today—but it can cost you significantly more after a serious claim.
Fortunately, there are better ways to save.
Your credit, insurance history, claims history, deductibles, discounts, household drivers, coverage structure, and even how you use your insurance can all influence what you pay.
Here are some of the smartest ways to lower your home and auto insurance costs without leaving yourself or your family improperly protected.
Quick Answer: How Can I Lower My Home and Auto Insurance?
Some of the best ways to potentially lower your home and auto insurance premiums include:
- Improving your credit
- Building a stronger insurance history
- Avoiding unnecessary small claims
- Increasing deductibles when financially appropriate
- Reviewing your home’s replacement cost
- Choosing appropriate auto liability limits
- Bundling home and auto when it makes sense
- Reviewing household drivers and adult children
- Taking advantage of available discounts
- Comparing insurance companies based on both coverage and price
- Reviewing your policies every year
The goal shouldn’t be to find the cheapest insurance possible.
The goal is to eliminate unnecessary costs while keeping the coverage you or your family actually needs.
1. Improve Your Credit
One of the most overlooked ways to potentially lower your home and auto insurance costs has nothing to do with your driving.
It’s your credit.
In many states, insurance companies may use a credit-based insurance score as one of the factors used to determine eligibility and premium.
A credit-based insurance score isn’t necessarily the same thing as the credit score you see when applying for a mortgage or car loan, but your credit history can be an important component.
Factors may include things such as:
- Payment history
- Outstanding debt
- Length of credit history
- Credit utilization
- Recent credit activity
- Other elements of your credit profile
Generally, maintaining strong credit can help improve your overall insurance profile with carriers that are permitted to use credit-based insurance information.
How Can You Improve Your Credit for Insurance?
Start with the same financial habits that generally improve your overall credit health:
- Pay bills on time.
- Keep credit card balances manageable.
- Reduce revolving debt.
- Avoid opening unnecessary accounts.
- Review your credit reports for errors.
- Maintain established accounts responsibly.
This isn’t an overnight insurance hack.
Improving your financial profile can take time, but over the long term, it can potentially have a meaningful impact on what you pay for insurance.
2. Understand and Improve Your Overall Insurance Score
Credit is important, but it isn’t the only part of your insurance profile.
Insurance companies evaluate risk using many different factors, and those factors vary by carrier and state.
Think of your overall insurance profile as the story you’re presenting to an insurance company.
A stronger insurance history can make you a more attractive customer to some carriers.
Factors that may influence your insurance eligibility or pricing can include:
- Credit-based insurance information where permitted
- Prior insurance history
- Length of continuous coverage
- Prior claims
- Frequency and severity of claims
- Driving history
- Tickets and accidents
- Number and age of household drivers
- Vehicles being insured
- Home characteristics
- Prior cancellations or lapses in coverage
- Deductibles and coverage selections
- Your location
- How long you’ve maintained insurance
Having Insurance in Your Own Name Matters
This is something younger adults especially need to understand.
Staying on someone else’s insurance indefinitely may not help you establish the same individual insurance history as maintaining coverage in your own name.
When appropriate, establishing your own insurance history can become valuable over time.
This is one reason we recommend looking beyond today’s premium. Sometimes paying slightly more today to establish a stronger long-term insurance profile can put you in a better position later.
Continuous Insurance Matters
Avoid unnecessary lapses in coverage.
Even a period without insurance can affect your eligibility or pricing with certain carriers.
If you’re selling a vehicle, moving, changing companies, or restructuring your insurance, make sure you understand exactly when one policy ends and another begins.
Don’t cancel coverage prematurely simply because you’re trying to save a few dollars.
3. Avoid Unnecessary Small Claims
This is one of the biggest insurance mistakes consumers make.
Your policy includes coverage, so naturally you assume:
“Why wouldn’t I use it?”
Because claim history matters.
Insurance companies may look at both the frequency and severity of prior claims when determining eligibility and pricing.
Several small claims over a short period will hurt your insurance profile more than consumers realize.
Insurance is generally most valuable when it’s protecting you against losses you cannot comfortably absorb yourself. That doesn’t mean you should never file a small claim.
It means you should understand the potential consequences before automatically turning every expense into an insurance claim.
Glass Claims Can Still Be Claims
A cracked windshield might seem harmless.
You may have glass coverage with a small deductible, or even no deductible depending on your policy.
That doesn’t necessarily mean every piece of glass damage should automatically become a claim.
A glass claim may still become part of your claims history.
If replacing or repairing the windshield is relatively inexpensive, it can be worth understanding your options before filing.
Roadside Assistance Claims Matter Too
Here’s another one consumers rarely think about.
Your auto policy may include roadside assistance for:
- Towing
- Jump starts
- Flat tires
- Lockouts
- Fuel delivery
It’s convenient.
But frequent use may also appear in your insurance history depending on the carrier and circumstances.
If you’re using roadside assistance several times a year, a standalone roadside program may sometimes make more sense than repeatedly using your auto insurance policy.
Your insurance policy should primarily be there for insurance losses, not necessarily every minor inconvenience associated with owning a vehicle. When in doubt, just get AAA roadside as those do not get reported on your score.
Small Homeowners Claims Can Be Particularly Important
The same philosophy applies to homeowners insurance.
Suppose you have a $2,500 deductible and discover $3,200 of covered damage.
Filing a claim to potentially recover $700 deserves careful consideration.
You’re putting a claim on your history for a relatively small potential insurance payment.
That doesn’t automatically mean you shouldn’t file it.
It means you should understand the economics and potential long-term implications first.
4. When SHOULD You File an Insurance Claim?
This is the other side of the conversation.
We don’t want people becoming so afraid of claims that they fail to use insurance when they genuinely need it.
That’s what insurance is for.
You should strongly consider reporting a claim when you’re dealing with situations such as:
- Significant property damage
- Serious auto accidents
- Injuries to another person
- Potential liability lawsuits
- Major water or fire damage
- Large theft losses
- Catastrophic weather losses
- Damage substantially exceeding your deductible
- Accidents involving multiple vehicles
- Situations where another party may pursue you for damages
Think About Severity, Not Just the Deductible
Here’s an easy way to think about it.
If you have a:
$2,500 deductible
and
$3,000 loss
you should at least evaluate whether filing a $500 potential claim makes sense.
If you have a:
$2,500 deductible
and
$75,000 loss
that’s exactly the type of financial risk insurance is designed to transfer.
Liability Claims Are Different
Be particularly careful when another person is involved.
A small-looking auto accident can turn into an injury claim later.
Someone slipping on your property can become a liability claim.
A seemingly minor incident can develop into something much larger.
When injuries, other people, significant property damage, or potential lawsuits are involved, contact your insurance professional promptly, NOT YOUR CARRIER.
Insurance should protect you from financial events you cannot comfortably absorb yourself.
An Important Note: Always Call Your Agent or Broker First. NEVER Call Your Carrier First Otherwise They Have to Assign a Claim Number. Paid or Unpaid It Counts Against You.
5. Raise Your Deductibles If You Can Afford Them
Increasing your deductible can be one of the simplest ways to lower an insurance premium.
Your deductible is the amount you’re responsible for before insurance begins paying on a covered loss subject to that deductible.
For example, you might compare:
- $500
- $1,000
- $2,500
- $5,000
Generally, accepting more of the initial risk yourself can reduce the premium.
But don’t automatically select the highest deductible available.
Ask yourself one question:
If I had a claim tomorrow, could I comfortably write that check?
If the answer is no, your deductible may be too high.
Compare the Actual Savings
Suppose increasing a deductible from $1,000 to $2,500 saves you $75 per year.
You’re accepting an additional $1,500 of potential out-of-pocket expense to save $75 annually.
That’s a very different decision than accepting the same additional risk to save $500 annually.
Don’t simply ask:
“Which deductible gives me the cheapest premium?”
Ask:
“How much risk am I accepting for the amount I’m saving?”
6. Make Sure Your Home Is Properly Insured
Lowering your dwelling coverage is not a smart way to save money.
Your home’s insurance value generally isn’t about its market value.
It’s about what it could cost to rebuild the home after a covered total loss, subject to the terms of your policy.
Those numbers can be dramatically different.
Construction costs change.
Material costs change.
Labor costs change.
And your house changes.
Think about everything that may have happened since your policy was originally written:
- Finished basement
- New kitchen
- Bathroom renovation
- Addition
- New deck
- Finished attic
- Upgraded flooring
- Custom cabinetry
- Detached structures
- Major remodeling
If the replacement cost estimate hasn’t kept up, your home could be underinsured.
Saving a few hundred dollars by intentionally lowering your dwelling coverage can create an enormous financial problem after a total loss.
Review Your Replacement Cost Regularly
Ask your insurance professional to review the replacement cost estimate used to insure your home.
Make sure the carrier knows about major renovations and improvements.
And don’t automatically assume the lowest dwelling limit is the best deal.
Adequate coverage should come before premium savings.
7. Don’t Underinsure Your Auto Liability
Another dangerous way to save money is reducing liability limits.
Your auto liability insurance helps protect you when you’re legally responsible for injuring someone or damaging their property.
Consider what vehicles cost today.
Then consider:
- Emergency transportation
- Hospital bills
- Surgery
- Rehabilitation
- Lost wages
- Long-term injuries
- Legal expenses
- Lawsuits
A serious accident can create hundreds of thousands or even millions of dollars in potential damages.
State Minimum Coverage Is a Legal Requirement, Not a Financial Plan
Your state’s minimum liability limits tell you the minimum amount of insurance necessary to legally drive.
They do not tell you how much insurance your family actually needs.
Those are two very different questions.
Your liability coverage should be evaluated based on factors such as:
- Assets
- Income
- Homeownership
- Savings
- Investments
- Household drivers
- Teenage drivers
- Overall liability exposure
Sometimes paying slightly more for significantly higher liability limits is one of the best values available in insurance.
8. Consider an Umbrella Policy Instead of Leaving Assets Exposed
Once your home and auto liability limits are properly structured, consider whether you need additional liability protection.
That’s where an umbrella policy comes in.
Umbrella insurance provides an additional layer of liability coverage above qualifying underlying policies.
This becomes especially important for families with:
- Significant assets
- Higher incomes
- Teen drivers
- Rental properties
- Pools
- Boats
- Multiple vehicles
- Higher public exposure
- Other substantial liability risks
Don’t assume umbrella insurance is only for millionaires.
A serious liability lawsuit can threaten future income as well as current assets.
9. Review Adult Children and Household Drivers
Adding a young driver can dramatically change an auto insurance premium.
But don’t automatically assume removing a child from your policy is allowed, or that it’s always the best solution.
If an adult child has:
- Moved out
- Purchased their own vehicle
- Established a separate permanent residence
- Become financially independent
it may be worth exploring whether they should establish their own auto insurance policy.
This can sometimes improve the parents’ insurance situation while allowing the adult child to begin establishing their own insurance history.
However, household-driver rules vary significantly by insurance company and state.
A licensed child who still lives in your household or regularly operates your vehicles generally cannot simply be removed to reduce the premium.
Always disclose household drivers accurately.
Trying to hide a driver to reduce your premium can create serious problems when a claim occurs.
10. Bundle Your Home and Auto Insurance, But Don’t Bundle Blindly
You’ve probably heard this one:
“Bundle and save.”
And sometimes it’s absolutely true.
Insurance companies often provide substantial multi-policy discounts when home and auto policies are placed together.
But here’s the part advertisements leave out:
Bundling isn’t automatically the best deal.
Carrier A may be excellent for your home but expensive for your vehicles.
Carrier B may be exceptional for your vehicles but not competitive on your home.
Sometimes splitting policies produces better overall coverage and pricing.
The right question isn’t:
“Can I bundle?”
It’s:
“Which combination gives my family the best overall protection and value?”
11. Take Advantage of Insurance Discounts
Depending on the company, these can include:
- Multi-policy discounts
- Multi-car discounts
- Automatic payments
- Paperless billing
- Paid-in-full discounts
- Early quoting
- Continuous insurance
- Good student discounts
- Defensive driving
- Vehicle safety technology
- Home security systems
- Automatic water shutoff devices
- Newer roofs
- Newer homes
- Telematics or safe-driving programs
Don’t assume your policy automatically includes every discount for which you’re eligible.
Review them.
12. Be Careful With Telematics and Usage-Based Insurance
Some carriers offer discounts for allowing an app or device to monitor driving behavior.
Depending on the program, it may track things such as:
- Mileage
- Hard braking
- Acceleration
- Time of day
- Phone use
- Driving patterns
For a safe, low-mileage driver, these programs may provide meaningful savings.
But understand how the program works before enrolling.
Ask whether your driving data can only earn a discount or whether poor driving results could also negatively affect your rate.
13. DO NOT Let Your Insurance Lapse
Canceling insurance to save money temporarily can create a bigger problem later.
A lapse in continuous auto insurance can affect future eligibility and pricing with some insurance companies.
If you’re changing carriers, coordinate the effective dates carefully.
Your new policy should generally be active before the old one ends.
Never create an accidental coverage gap just to save a few days of premium.
If for some reason you need to cancel insurance and don’t have a car to fill the need, look into what’s called a non-owned auto policy.
14. Review Your Insurance Every Year
This may be the easiest recommendation on this entire list.
Review your insurance annually.
A lot can change in twelve months.
You may have:
- Bought a vehicle
- Sold a vehicle
- Paid off a loan
- Renovated your home
- Added a driver
- Had a child move out
- Improved your credit
- Installed a new roof
- Started working from home
- Purchased expensive property
- Increased your income
- Accumulated more assets
Your insurance needs to change with your life.
An annual review gives you an opportunity to identify both coverage gaps and potential savings.
Don’t Save $300 and Risk $300,000
This is the most important lesson in this entire article.
Saving money on insurance is smart.
Being underinsured isn’t.
If reducing your premium by $300 per year means eliminating $250,000 of liability protection, that’s probably not the kind of savings your family needs.
Look first for savings that don’t sacrifice protection:
Improve your credit.
Build a strong insurance history.
Avoid unnecessary claims.
Choose sensible deductibles.
Use available discounts.
Structure household drivers correctly.
Compare carriers.
Then make sure the coverage that’s left is actually enough to protect you.
That’s how you save money on insurance intelligently.
Frequently Asked Questions About Saving Money on Insurance
What is the best way to lower my car insurance?
There isn’t one solution for everyone. Improving credit where permitted, maintaining continuous insurance, avoiding unnecessary claims, increasing deductibles appropriately, using available discounts, bundling policies when advantageous, and maintaining a clean driving record can all potentially reduce your auto insurance costs.
What is the best way to lower homeowners insurance?
Consider reviewing your deductible, available discounts, home characteristics, replacement cost estimate, claim history, security and protective devices, and whether bundling with your auto insurance provides better overall value.
Does improving my credit lower my insurance?
It can. In states where credit-based insurance information is permitted, your credit profile may be one factor insurers use when determining pricing or eligibility. The exact impact varies by carrier and state.
Do insurance claims make your rates go up?
They can. The impact depends on the type of claim, severity, frequency, carrier, state, and other underwriting factors. Multiple claims can also affect which insurance companies are willing to insure you.
Does a windshield claim affect insurance?
A glass claim can become part of your claims history. How it affects your premium or eligibility varies by insurance company and state. Before filing a small glass claim, consider the repair cost, deductible, and your existing claims history.
Do roadside assistance claims count against insurance?
Roadside assistance usage may be recorded and can potentially be considered by insurers depending on the carrier and circumstances. Frequent roadside usage is one reason some consumers choose a separate roadside assistance program instead of relying exclusively on their auto policy.
When should I file a homeowners insurance claim?
Generally, homeowners insurance is most valuable for significant covered losses that would create a meaningful financial burden. For damage only slightly above your deductible, consider discussing the situation with your insurance professional before filing. Major losses such as fires, severe water damage, significant storm damage, theft, or liability incidents are exactly why homeowners insurance exists.
Should I raise my deductible to lower my insurance?
Potentially. A higher deductible can reduce premiums, but only choose an amount you could comfortably pay tomorrow if a loss occurred. Compare the annual premium savings against the additional amount you’re accepting out of pocket.
Does bundling home and auto always save money?
No. Multi-policy discounts can be substantial, but sometimes placing home and auto with separate carriers produces better overall pricing or coverage. Compare the complete package rather than the discount percentage alone.
Should my adult child have their own car insurance policy?
Possibly. If an adult child has moved out, owns their own vehicle, and maintains a separate residence, establishing their own policy may make sense and can help establish their individual insurance history. Household and driver requirements vary by carrier and state, so don’t remove a driver without discussing the situation with your insurance professional.
How can I improve my insurance score?
Depending on how a particular insurer evaluates risk, maintaining good credit where permitted, keeping continuous insurance, avoiding unnecessary claims, maintaining a clean driving record, establishing insurance history in your own name when appropriate, and avoiding coverage lapses may all contribute to a stronger overall insurance profile.
How often should I shop my home and auto insurance?
There isn’t a universal schedule. Rather than constantly switching carriers, review your policies at least annually and shop when premiums, coverage needs, carrier appetite, or your personal circumstances change significantly.
How do I know if I’m underinsured?
Start by reviewing your home’s replacement cost, auto liability limits, uninsured/underinsured motorist coverage, deductibles, personal property coverage, and umbrella liability protection. Don’t assume that because a policy meets state requirements or your mortgage company’s requirements that it adequately protects your family.
Want to Save Money? Start With Your Coverage.
Before you start cutting coverage or chasing the cheapest insurance quote, find out what you actually have.
At E3 Insurance, our complimentary coverage review looks beyond the premium.
We’ll help you understand:
- Your current home and auto coverage
- Your liability limits
- Your deductibles
- Your home’s replacement cost
- Potential coverage gaps
- Available opportunities to reduce costs
- Whether your insurance still fits your family’s needs
You may discover opportunities to save.
You may discover you’re underinsured.
Or you may discover that your current policy is exactly where it needs to be.
Either way, you’ll finally know what you’re paying for.
