Alyssa Lane
Homeowners insurance is a necessity, but that doesn't mean it has to be expensive. There are several ways to reduce your insurance costs, including taking advantage of discounts offered by your insurance company. One such discount is the companion discount, also known as a multi-policy discount, which is when you purchase multiple types of insurance from the same company, such as combining your home and auto insurance policies. By doing so, you're giving more business to a single insurer, who may reward you with a discount. This discount is especially useful if you value convenience and would prefer to deal with only one insurance company. However, it is important to research and compare policies, as the savings may not always be significant.
| Characteristics | Values |
|---|---|
| Multi-policy discount | Purchasing multiple types of insurance from the same company, like bundling your home and auto insurance policies. |
| Paid-in-full discount | Paying your premiums upfront for the year instead of opting for monthly payments. |
| Loyalty discount | Staying with the same insurance company for several years. |
| No-claims discount | Not filing any claims for a certain number of years. |
| Safety and security features | Installing protective devices such as smoke detectors, carbon monoxide sensors, sprinklers, security systems, and other devices that reduce the chances of filing a claim. |
| New construction discount | Owning a newly constructed home with modern materials and features that are less likely to experience issues and result in costly claims. |
| Smart home discount | Having a modern smart home with devices that increase energy efficiency, protect the home, detect issues early, minimize damage, and reduce the number of claims. |
| Homeowners Association (HOA) membership | Belonging to an HOA as these communities tend to have high standards for home maintenance, lowering the risk of theft, vandalism, and other issues. |
| Senior citizen discount | Being over the age of 65 or retired, as seniors tend to spend more time at home, reducing the risk of break-ins and certain types of damage. |
| Non-smoker discount | Not smoking, as smoking increases the risk of fires and other health-related issues. |
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What You'll Learn
Discounts for bundling home and auto insurance policies
A companion discount, also known as a multi-policy discount, is when you purchase multiple types of insurance from the same company, such as combining your home and auto insurance policies. This often results in significant discounts on your insurance premiums.
Many insurance companies, including Progressive and GEICO, offer multi-policy discounts for bundling home and auto insurance policies. By bundling your insurance policies, you are giving more business to one insurer, which incentivizes them to offer you a discount. In addition to home and auto insurance, Progressive also offers multi-policy discounts for bundling RV, boat, motorcycle, and more.
The amount of discount you receive can vary from company to company, and it is important to research before committing to a single carrier offering a home insurance discount for bundling. The best times to bundle insurance are when purchasing a new policy, during renewal, or after significant life changes, such as buying a home or car.
In addition to bundling, there are other ways to save on homeowners insurance. For example, insurance companies may offer discounts for newly constructed homes, loyalty to the company, or for not filing claims. You can also lower your insurance premiums by installing safety and security features in your home, such as fire alarms, security monitoring, or fire sprinklers.
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Loyalty discounts for longstanding customers
While the specific discount will vary from carrier to carrier, most homeowners insurance carriers will reward longstanding customers with a loyalty discount. This discount tends to grow over time as customers stay with the same insurance company. Loyalty discounts are typically offered to customers who have been with the same provider for at least three to five years, with an average savings of 5% after this period. Savings can increase to 6% after five years, 8% after 10 years, and 10% after six years. State Farm, for example, offers a discount of up to 24% to customers who have been with the company for at least nine years, provided they were claim-free during the five years prior.
Loyalty discounts are a great incentive to stay with your insurance company. However, it is still recommended that you shop around and compare policies annually to ensure you are getting the best rate. Some insurance companies offer a "prior insurance discount" to new customers to avoid losing customers to more competitive rates.
In addition to loyalty discounts, insurance companies may offer discounts to longstanding customers who have not filed any claims during their time with the company, known as a "no claims discount". The longer you remain claim-free, the greater your discount.
Other discounts may be available to longstanding customers who have made home upgrades, such as installing a new roof, upgrading electrical or plumbing systems, or adding security systems and protective devices.
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Discounts for new homes
When it comes to homeowners insurance, there are various discounts available that can help lower your premiums and increase savings. One of the most common ways to get a discount is by bundling your home and auto insurance policies. By purchasing multiple types of insurance from the same company, you can often receive a multi-policy discount. This incentivizes insurance providers by giving them more business, and in return, they offer you a discount.
If you're buying a new home, you may be eligible for a "new customer" discount if you purchase the insurance within the first twelve months of buying the property. Insurance companies may also offer discounts for newly constructed homes, as they are less likely to experience wear and tear and are made with modern materials that reduce the risk of costly claims. For example, new pipes are less likely to burst, new furnaces are less likely to malfunction, and new electrical wires are less likely to catch fire.
Additionally, insurance providers may offer discounts for homes with certain safety and security features. Protective devices such as smoke detectors, carbon monoxide sensors, sprinklers, security systems, and impact-resistant windows can reduce the chances of claims or losses, so many insurance carriers offer discounts for homeowners who install these devices. Some insurance companies also provide discounts for homes with smart home devices, as they can increase energy efficiency, help protect homes, detect issues before they occur, minimize damage, and reduce the number of claims filed.
Another way to save on homeowners insurance is to take advantage of loyalty discounts. Insurance companies value long-term customers, so they may offer savings if you stay with the same provider for several years. However, it's important to periodically re-shop your insurance and compare policies to ensure you're getting the best coverage and rates.
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Discounts for security systems and protective devices
Home insurance companies define security as measures taken to protect your home from theft, vandalism, and other risks. These measures can include burglar alarms, locks, motion sensors, exterior lighting, and cameras, among other preventative measures.
Many insurance companies offer discounts for homes equipped with security systems. You can lower your premiums by as much as 15%–20%, depending on your location and the type of system you install. Most insurance companies offer a discount of 2% to 5% on your premiums if you install a home security system, but a few insurers offer up to 15%.
You can get a protective devices discount for a variety of safety and anti-theft devices, including security systems with both DIY and professional monitoring options. Many providers will offer insurance discounts for video surveillance cameras and home security systems equipped with an alarm, door and window sensors, and motion sensors.
Some insurers offer separate policy discounts for deadbolts, fire sprinklers, and security systems, while others may include multiple safety or surveillance features under one blanket policy credit. For example, you may need to have deadbolts installed on all exterior doors to receive a policy credit.
Smart home devices are also favoured by insurance providers. They increase energy efficiency and help protect homes by detecting issues before they happen, minimizing damage, and lowering the number of claims filed.
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Discounts for not filing claims
Companion discounts, also known as multi-policy or bundling discounts, are offered by insurance companies when you purchase multiple types of insurance policies from the same provider. For example, you can bundle your home insurance with auto insurance or life insurance. Some companies offer multipolicy discounts for other types of insurance as well, such as renters insurance or auto insurance. This is a common way to save on insurance costs and can often save you up to 25% off premiums.
Now, let's focus on discounts related to not filing claims:
Claims-Free Discounts:
If you haven't filed a home insurance claim in several years, typically three to five years, you may be eligible for a claims-free discount. This type of discount rewards policyholders for not submitting any claims and is sometimes referred to as a no-claims discount, loss-free discount, or prior insurance discount. The longer you go without filing a claim, the higher the potential savings. However, the specific discount percentage may vary depending on the insurance company and the state you live in.
Fortified Home Discount:
Insurance carriers may offer a fortified home discount if your home has been specifically designed or fortified to withstand damage from severe weather events such as high winds, hail, or hurricanes. This discount is offered because these features lower the chances of filing a claim due to weather-related damage.
Protective Device Discounts:
Insurance companies often provide discounts for homes equipped with protective devices that reduce the likelihood of filing a claim or experiencing a loss. These devices include smoke detectors, carbon monoxide sensors, sprinklers, security systems, and impact-resistant windows. These discounts may be categorized by the type of device, such as a sprinkler discount or security system discount.
Loyalty Discounts:
Some insurance companies offer loyalty discounts to customers who have been with them for an extended period. These discounts reward your continued business and can increase over time. However, it's still recommended to compare insurance rates annually to ensure you're getting the best deal.
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Frequently asked questions
A companion discount, also known as a multi-policy discount, is when you get a discount for purchasing multiple types of insurance from the same company. For example, you can bundle your home and auto insurance policies or auto and renters insurance.
The amount you can save with a companion discount varies from company to company. It may not always be a significant amount, so it is worth shopping around to see if it is cheaper to bundle or get each coverage separately.
There are several other ways to save on homeowners insurance, including discounts for being a loyal customer, not filing claims, paying your premiums upfront, owning a newly constructed home, installing protective devices, and being a part of a homeowners association (HOA).
To get a companion discount, you can contact your insurance company and ask about the different types of insurance they offer. If you are purchasing a new type of insurance, you can ask for a quote that includes the companion discount.
