There Is a Simple Way to Lower Your Home-Insurance Bill. It Is Also a Risk.

livemint.com:

Homeowners in search of relief from rising insurance bills are offering to pay more out of pocket in the event of fire, theft or other damage to their property. In practice, consumers are doing this by raising their deductible. A deductible is the amount paid by a policyholder before insurance kicks in.

Higher deductibles generally mean lower premiums, but it is risky. While the standard home-insurance deductible typically ranges from $500 to $1,000, according to an analysis of millions of policies by digital insurance marketplace Matic Insurance, more homeowners are choosing higher deductibles. The number of new policies with $2,000 to $2,500 deductibles nearly tripled from 2019 to August of this year.

The number of policies with $500 deductibles fell by about two-thirds during that time. The decision to increase their deductible comes as the national average for home-insurance premiums based on $250,000 in dwelling coverage increased this year to $1,428 annually, up 20% from 2022, according to Bankrate. Boosting their deductible is one of the few strategies homeowners can use to reduce their premiums and keep their home insured as inflation continues to put pressure on their budgets.

Even shopping around has a limited benefit since rising construction costs and natural disasters are leading nearly all insurers to raise their prices and cover less. “Homeowners are desperately looking for ways to save on their premiums right now," said John Costello, former chairman of the Independent Insurance Agents and Brokers of America, a national trade association. Scott and Cindi Fromm’s home-insurance premium rose to $2,700 from $1,600 a year.