9 Ways to Lower Insurance Premiums as Natural Disasters Rise

Severe weather events like floods, hurricanes and earthquakes are increasing in frequency and severity, and natural disasters and insurance premiums are linked. However, Ann Bass, Manager of Personal Lines Sales and Service at First Citizens, says increased insurance costs aren't inevitable.

By taking informed action ahead of events on any scale—from overflowing pipes to natural disasters—you can be better prepared. Bass believes these nine practical steps can help any homeowner lower insurance premiums and keep losses to a minimum, even as extreme weather events escalate.

1Review your coverage annually

Start by reviewing your insurance coverage with your advisor every year. This helps ensure your costs align with the protection you actually need. At the very least, an annual review gives you a chance to confirm that your policy accounts for any new risk-reduction steps you've taken throughout the year.

"We often see homeowners avoid this step because they assume their insurance costs will rise over time. In fact, we often see homeowners being underinsured or paying too much simply because their policy hasn't kept pace with changes to their property or risk profile," Bass explains. "A quick review each year often makes a big difference in both cost and peace of mind."

2Bundle insurance policies

Consolidating your insurance—or combining multiple types of coverage into one comprehensive plan—is a solid strategy that can result in better value and easier management. "Companies tend to provide meaningful discounts when you combine your property insurance and other types of coverage, like vehicle, life and umbrella insurance," Bass says.

3Pay in full

Another approach to help lower your insurance costs is to pay your policy up front and in full annually, instead of through installments. This may not only offer valuable savings but it also could remove any last-minute concerns around whether you remembered to pay. "I've seen too many instances of policyholders who find themselves without coverage when they need it most because they've forgotten to pay an installment," Bass says.

4Choose higher deductibles if you have cash reserves

According to Bass, opting for higher deductibles can help lower your monthly premiums. However, she says it's important to make sure you have sufficient cash reserves to cover the deductible that arises if you need to make a claim.

5Implement risk-mitigation measures

"If you're considering lowering your premiums by choosing higher deductibles, you'll want to be sure you've made steps to prevent losses from happening in the first place," Bass says. Remediation ahead of time includes taking actions like installing protective systems and strengthening building infrastructure.

For example, you should consider:

• Installing fire and burglar alarms
• Setting up generators to alleviate the impacts of power outages
• Regulating the flow of the main water line with shut-off systems to prevent water damage, a major cause of insurance claims
• Leveraging smart devices that alert you when they detect an irregularity, such as a change in water pressure or an electrical surge
• Conducting regular maintenance—like clearing gutters and removing overgrown or dead trees—and using fire-resistant building materials and storm shutters to reduce damage risk

6Demonstrate a strong claims history

Research indicates that smaller claims drive up homeowner premiums. One survey shows that smaller claims, especially for damage that's likely to recur, leads to a 6% increase in premiums.

"Insurance policies are intended to safeguard against significant financial losses," Bass says. "Using them for minor or maintenance-related issues can lead to higher premiums or nonrenewal over time. A more strategic approach is to reserve your claims for events that truly disrupt your financial stability."

7Properly insure valuable items

High-value items like jewelry, paintings and antiques typically have a separate limit on a homeowner policy. "We recommend including these on top of your general policy," Bass says. It's a good practice to provide receipts and appraisals for each item, as well as agree on the amount your insurer will pay you after theft or damage.

"I always recommend taking pictures or even making a video of your personal property," she adds. "In the event of a claim, this provides invaluable information that will help both you and the adjuster determine the cost to replace the contents of your home. High-value items aren't always covered in case of loss, so missing these steps can lead to a payout that's far below the real value."

8Include weather-related protections

With the sharp rise in natural disasters, many homeowners are surprised to learn that the aftermath of these events isn't always covered by their standard insurance policies. As Bass explains, major natural disasters—such as earthquakes and floods—often require separate coverage.

Earthquake insurance typically must be added separately because it's not included in most standard policies—neither is flood insurance, which is typically obtained through the National Flood Insurance Program or a private flood carrier. However, some insurers now offer inland flood coverage for lower-risk areas, which can be endorsed onto your policy.

Rather than assume you're protected, it's important to confirm with your insurance partner whether your policy includes coverage for these major events and explore endorsements—or add-ons to your standard policy, that can close the gaps.

9Confirm water and sewer backup coverage

While not on the scale of an earthquake or hurricane, sewage problems occur frequently and are often overlooked by homeowners. "When your 3-year-old nephew throws a whole roll of toilet paper in the toilet and there's sewage overflowing, you want insurance to cover the damage that results from the overflow," Bass says.

The bottom line

Increases in natural disasters and adverse impacts from climate change are ongoing, and homeowners can no longer dismiss catastrophic events like earthquakes as impossible—or even unlikely. This growing risk is increasingly reflected in premiums charged by insurers. However, it's possible to manage these risks effectively and purchase insurance on a more informed, cost-effective basis.

"When you purchase a policy, it's all about price," Bass says. "When you have a loss, it's all about coverage. You have to balance those two." Talk to a First Citizens insurance agent to help you design a coverage plan that works for you.