Is Homeowners Insurance Tax Deductible? What You Can and Can’t Claim
Why You Can Trust EverQuote
EverQuote powers millions of shopper requests every month, teaming up with industry-leading insurance specialists to address real-world challenges faced by people every day. We partner with the largest insurance providers in the nation, and our content is carefully crafted by experts and reviewed by licensed insurance agents for accuracy and relevance.
Homeowners insurance premium payments are not usually tax-deductible. However, there are some specific cases that help you deduct more from your taxable income related to home insurance. These can include owning rental properties, using a home offices, or claiming disaster losses. Whether it is worth deducting insurance costs must be considered before making changes to your tax return.
So is homeowners insurance tax deductible? Learn when it may be, plus other ways to save the most on your insurance and taxes.
When Homeowners Insurance May Be Deductible
It's generally a good idea to deduct any allowed costs from your taxable income to reduce your overall taxes paid. But most homeowners cannot list the costs paid towards their homeowners insurance as one of these deductible expenses.
However, if you own a rental property, home office, or mixed-use home, or have suffered disaster losses, it may be possible to deduct some of these expenses from your taxable income. Here's what you need to know about applicable situations.
Rental Properties
If you own rental properties, you can deduct the cost of home insurance from your taxes. If the home you rent out is different from your main home and you pay homeowners insurance on it, consider reducing your taxable income by listing these premiums on your taxes.
This is allowable because the IRS views the home insurance on your rental property as part of the necessary expenses of operating and maintaining your rental property. It falls into the same category as taxes and maintenance costs.
Home Office Use
You can deduct a portion of your home insurance costs when you have an eligible home office or studio. This portion is equivalent to the percentage of your home's square footage dedicated to the office. So if your in-home office is 15% of your house's size, you could claim 15% of your home insurance premium as a deduction.
There are specific requirements for a home office to be eligible in the eyes of the IRS. The space in the home claimed as the home office must be regularly and exclusively used for the owner's work or business. You may not be a W-2 employee simply working at home to qualify for this deduction, either. This may apply to renters with renters insurance as well.
Mixed-Use homes
Do you run a daycare or retail business out of your primary home? Mixed-use homes fall under similar qualifications for a home office. If your space is eligible, you may be able to deduct related insurance costs in proportion to the space.
Casualty Losses (Disasters)
The IRS provides guidelines to deduct home insurance costs in the face of casualty losses of your personal-use property. To qualify, the cause of the loss must be a federally declared disaster, such as a hurricane. If you file a claim that exceeds what homeowners insurance covers, you can deduct the remaining cost of this casualty loss.
For example, if your homeowners insurance only covers 50% of the repair costs from wind damage from a federally declared disaster hurricane, you may claim a deduction of the remaining 50% of the costs.
When Homeowners Insurance Isn’t Deductible
Most of the time, house insurance isn't deductible on taxes. Your standard primary home premiums rarely count as a tax deduction. If you don't own a rental property, operate a business from your home, or sustain serious, uncovered disaster damage, there's no way to qualify for a deduction related to homeowners insurance. Standard coverage on a personal home does not permit homeowners insurance to be a tax deduction.
Tips for Claiming Deductions (and Avoiding Errors)
Though house insurance is not tax deductible on your main property, there are other great ways to save on your taxes by claiming eligible deductions and avoiding simple errors.
Your first step should be to consult a tax professional. Even if you end up filing your own taxes, getting advice from an expert about what qualifies for deductions and other tax savings hacks can optimize your tax return. They can help you spot any errors that could cost you more.
Next, keep records of any insurance payments or repairs. If you do have a qualified event or payment, it's easier to prove it with excellent records. Bring these records when you go to speak to a tax expert so they have all the information before advising you.
Finally, while generally standard home insurance isn't tax deductible, make sure you understand IRS rules related to having a rental property, home office, or mixed-use property. Many deduction opportunities are related to having qualified business expenses, such as insurance on a rental property or claiming a partial reduction for a home office. Learning to spot when you may have an eligible business expense to deduct is part of maximizing your return.
Compare Insurance Options to Optimize Your Coverage
Though a tax deduction for homeowners insurance costs may be out of reach for most homeowners, there are other ways to find savings on your living expenses. You can save on your home insurance by comparing coverage and adjusting your coverage for the best price.
Work with EverQuote to get a free, custom home insurance quote comparison in just minutes. Insurance prices fluctuate daily, so compare and shop around regularly to make sure you're paying the optimal price for your optimized coverage. Reach out to find savings today.
FAQs
Can you write off your house insurance on your taxes?
+
Are insurance premiums 100% tax-deductible?
+
Is there a deductible for homeowners insurance?
+
Premiums are sourced from over 30,000 zip codes across 200 insurance companies. We estimate premiums based on public filings for policies seeking 50/100 in liability with $500 deductibles for collision and comprehensive coverage. Estimated rates are based on a 35-year-old single female with a good credit score and no history of accidents or violations driving a 2023 Toyota RAV4 LE. We partner with Quadrant Information Services to source our data and assume no unique benefits or discounts are applied for these rates (unless otherwise stated). Your own rates may be different.