6 Signs You’re Overpaying on Home Insurance
Written by
Paige Cerulli
Edited by
Zuri Anderson
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If you’re finding it harder to keep up with your home insurance costs, you’re not alone. In April 2025, the Consumer Federation of America found that home insurance premiums increased by an average of 24% over the past three years. In fact, insurance costs rose twice as fast as inflation from 2021 to 2024, leaving homeowners feeling the impact of those skyrocketing costs.
While home insurance will naturally increase over time, it’s important to be able to recognize when you’re paying too much. These six signs can tell you you’re overpaying, so you can take action to lower your rates.
You See a Sudden, Steep Increase
Travis Hodges, managing director at VIU by HUB, explained that climate change, inflation and other economic pressures are causing insurance premiums to rise.
“Annual increases in the double digits are generally expected in today’s market, especially in regions prone to severe weather,” he said. But Hodges cautioned that if you experience a sudden, steep increase without any clear explanation or reason, such as a change in claim history or a major change in your coverage, it could be a red flag that you’re overpaying.
According to Mayra Figueroa, account manager of All Solutions Insurance in California, an increase of between 5% and 10% annually is reasonable. However, if you notice an increase of 20% or more without a change in your coverage or claims, it’s time to have your agent review your policy to identify the cause of the price increase.
You Haven’t Reported Risk-Reducing Home Improvements
Figueroa explained that risk-reducing home improvements, like upgrading your roof or installing a security system, can lower the likelihood of damage or loss to your home. As a result, you might qualify for a discount on your home insurance when you make such improvements.
“When planning these upgrades, homeowners should carefully evaluate the upfront cost and the long-term value in terms of both safety and potential insurance savings,” said Figueroa.
Once you’ve made the updates, it’s essential to report them to your home insurance company so you can receive the discount on your insurance.
You Haven’t Reviewed Your Deductible
If your policy has a low deductible, you’ll pay higher premiums. Choosing a higher deductible can lower your premiums, but you’ll need to be prepared to pay that deductible if you ever have to file a claim.
“When choosing a deductible, homeowners should weigh their financial comfort and risk tolerance, keeping in mind that a smaller deductible may encourage frequent claims, which can lead to higher premiums or potential non-renewal,” said Figueroa. “A good rule of thumb is to reserve claims for significant losses and handle minor repairs out of pocket to protect your long-term insurance costs.”
You Don’t Understand Your Coverage
If you don’t understand the types of coverage on your policy and why you have them, you could be paying for coverage you don’t need.
Hodges explained that a typical homeowners policy usually covers damage to your home and belongings caused by events like fires, thefts and certain weather events. It also includes liability coverage, but typically excludes flood damage, earthquake damage or routine wear and tear. Understanding your coverage can help you determine if you’re appropriately protected or if you’re paying for more coverage than you really need.
“In today’s environment, there’s a lot of value in being an informed consumer versus just being a passenger on a ship,” he said. “To avoid overpaying or being underinsured, homeowners should review their coverage annually with a broker to make sure their policy is comprehensive, cost-effective and aligned with their individual needs.”
You’re Not Bundling Your Home Insurance
“One of the most impactful is bundling home and auto insurance policies, as many insurers offer significant multi-policy discounts,” said Figueroa.
If you have both a home insurance and a car insurance policy through the same insurance company, contact your insurer to ask to bundle those policies. If your policies are through separate insurance companies, you may be able to save money by transferring your coverage over to a single company so you can take advantage of a home and auto bundle.
You Haven’t Reviewed Your Coverage Annually
Regularly reviewing your coverage can help you spot price increases and make sure the coverage is appropriate for your needs. Figueroa recommended that homeowners review their home insurance policies annually.
“It is advisable to contact the insurance company or agent after major life changes such as home renovations, installing security systems or purchasing additional assets, as these can impact premiums and eligibility for discounts,” she said.
In addition to reviewing your insurance, Figueroa recommended you shop for insurance annually and compare quotes. Periodically shopping for insurance can help ensure you’re getting the best price on your coverage.
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