Reducing Homeowner’s Insurance Costs: Our Success Story

The cost of living has risen and there seems to be no ending near. Many people struggle to get by and some have even taken more than one job to keep afloat. We are in the same situation as many. Cutting expenses here and there as much as possible worked for a bit, but not for everything. However, we were not about to take another job but found another way that did not involve digging into our savings or starting a second job.

With a little bit of time, patience, research, and perseverance you can make it happen too. Therefore, I want to share the method that helped me lower the highest increase we have had from one year to another.

We recently had a huge hike in our homeowner’s insurance. Last year it doubled, going from $2500 to $5040. Yes, we had a claim in 2018 after Hurricane Irma, but that’s why we pay homeowner’s insurance, right? Before that claim, we had none for more than 20 years. So it was concerning that the increase was so high. The hike did not make sense to me. After all, the roof is new and according to the wind mitigation inspector, it still has a good amount of years on it.

Being an accountant, I like to keep our budget in check. We did not want our mortgage payment to increase. Therefore, we paid the difference before the increase went into effect in August 2023. But in February 2024, we received a letter from our mortgage lender. After reassessing our account, and assuming our insurance would continue at $5040 in August 2024, our new mortgage payment would increase from $834 to $1350 going into effect on March 1.

We were comfortable with our mortgage payment and didn’t want it to change. In the past years, we paid the escrow difference to keep our mortgage at less than $1,000 monthly. So even though our insurance did not lapse until August 2024, we took a proactive approach and researched thoroughly for a new insurance company. Our new quote came in at $1,500. The new insurance company required us to have a wind mitigation inspection and a 4-point inspection, with an out-of-pocket cost of $245. The process was quick, easy, and well worth it.

My next step was to notify our mortgage provider that we were switching insurances. The new insurance company sent our mortgage provider the new bill. The mortgage provider paid it, and we received a refund of $2,600 from our old insurance. Since our mortgage escrow was short by $2,098; we paid the shortage with that refund and had our mortgage provider reassess our mortgage. It turned out better than we expected because our mortgage dropped to $748 beginning in May 2024.

It did not take more than a week to research and switch companies. A few calls, and emails, but it was worth the hassle. We still had to pay $1,350 in March and $1046.71 in April. But because the refund received was more than the escrow shortage, we had that extra money which went towards March with our regular payment and April's was doable with our savings. It all worked out perfectly.

I still laugh when I remember the insurance company telling me that we were high-risk because we had a claim in 2018. So, if you are in a similar situation, do not just take what the insurance company offers you. Research, inquire, persevere, have patience, and maybe you will find a better deal. I’m not sure it will work for everyone, but it is worth a try.