The cost of insurance coverage has skyrocketed over the last few years despite the fact that inflation has slowed pretty dramatically. According to Insurify data, the average annual premium for homeowners insurance jumped roughly 20% between 2021 and 2023 and will hit an average of $2,522 a year in 2024.

Car insurance has also headed up with the average premium jumping up 16.5% from 2023 to 2024 according to the Bureau of Labor Statistics. The average cost for full coverage car insurance recently hit $2,348 a year.

As the cost of insuring most people’s largest assets, their home and car, has gone up dramatically many are looking for ways to lower their insurance costs.

Here are six ways to help keep your insurance costs affordable:

Shop your coverage

This is often the best way to lower your insurance costs. Insurers rate risk differently which can result in dramatically different premium quotes. According to a new survey by Autoinsurance.com, 37% of drivers have already requested a quote from a new insurer and 27% plan to switch insurance companies.

Experts recommend shopping your coverage once a year. Gather quotes from at least five insurers and always make sure you are comparing apples to apples when it comes to coverage levels and deductibles.

While a lower premium is always good, it is also a good idea to check the financial strength of any insurer you are considering. A low premium is never a bargain if you have trouble filing a claim or getting a hold of customer service.

Check AM Best and Demotech, for ratings regarding insurers’ financial strength and reliability.

“What you’re looking for is the financial strength of the carrier, which shows their ability to pay future claims, and also understanding what their history of paying claims has been in the past,” said insurance agent David Carothers, a principal at Florida Risk Partners in a recent NBC CT article.

Raise your deductible

The policy deductible is the amount you will have to cover out of pocket before your coverage will step up to pay the balance.  The higher your deductible, the lower your premium so raising your deductible should lower your insurance costs.

If you can afford to double your deductible your premium should drop dramatically.  Always choose a deductible that you can easily afford in the event you have to make a claim on your policy.

Change your coverages

Regardless of whether you are trying to lower your homeowner or auto insurance premium, changing up your coverages can help lower your costs. Here are a couple of ways to change your coverages that should result in savings:

• Homeowners: Lowering coverage levels on jewelry, artwork or other high-value items can make your coverage more affordable. If you have made changes to your home such as putting on a new roof, adding a security system, or installing impact resistant windows notify your insurer to see if the changes will reduce your premium.
• Auto insurance: If you have an older vehicle that you would replace instead of repair after an accident, you may want to drop collision and comprehensive on the vehicle to lower your insurance costs.

Discounts can help lower costs

Insurance companies offer tons of discounts for both homeowners and car insurance so make sure you are getting all of the discounts that you are qualified to receive.

Bundling is a discount that lowers your costs if you purchase homeowers and auto insurance from the same insurer. This can be a significant discount, up to 25% in many cases.

Other common discounts include:

• Good student
• Defensive driver
• Monitored security system
• Completing a defensive driving course
• Claim free
• Loyalty discount
• Paperless discount

Improve your credit score

Most states allow insurers to consider your credit score when setting both a homeowners and auto insurance premium. Statistics show that people with a low credit score are more likely to file a claim, so insurers charge a higher premium.

According to Bankrate, drivers with poor credit pay an average of $4,349 which is dramatically more than the $2,033 average that drivers with excellent credit pay.

If you have improved your credit score recently it is a good idea to shop your coverage to find a better rate.

Get quotes ahead of time

The cost of insurance should be factored into your purchasing decisions from the beginning. If you are looking to purchase a new home, gather quotes from insurers prior to putting in an offer so there are no surprises when it’s time to close on the house.

If the home is located in a high-crime area or in an area where severe weather is common, insurance may be more expensive than you imagine, or you may be required to carry a flood insurance policy which can dramatically raise your cost of coverage.

If you are shopping for a new car, pricing out policies is also a good idea. Sports, luxury and EVs can be more expensive to insure than many drivers imagine so it is a good idea to make sure you can easily afford coverage before buying a car.