How to Save on Home Insurance
Every homeowner needs home insurance. But there are a number of ways you can cut down on the cost of your policy while still being protected. From taking advantage of discounts offered by your insurance company to properly maintaining your home, you can retain both peace of mind and more of your hard-earned money.
Here are some of the best ways to save money on your home insurance policy:
- Bundling your home and auto insurance with the same insurer. Insurance companies want as much of your business as possible and they’re willing to offer incentives to get it. If you switch your car insurance to the company that insures your home, you may be able to receive a discount on your premiums.
- Buy a newly-built house or condo. If your home is less than 10 years old, you may qualify for a discount on your insurance. Newer homes and condos are less likely to have issues that’ll result in claims so you’ll be a lower risk in the eyes of the insurance company.
- Have a properly-installed (and monitored) alarm system. One of the main things your policy insures against is theft. So if you take precautions by installing a monitored alarm system, the odds that you’ll suffer a break-in are decreased. This means that the insurer will deem you less likely to file a claim.
- Pay your premiums annually. While you can pay your home insurance premiums monthly, you can actually save money if you do it once a year instead.
- Don’t get too much coverage. Every homeowner wants to be sufficiently protected with insurance but the flip side to this is that too much coverage means your premiums will be a lot higher. Not surprisingly, insurance companies will try to steer you towards the most expensive coverage so bear in mind you may not actually need it. Take a good look at your home’s contents and see if you have excessive coverage for certain things (such as electronics or jewellery).
- Allow the insurance company to do a credit check on you. It may seem intrusive but granting permission to the insurance company to do a credit check on you can save you money. If you have a good credit rating, the insurer may give you a discount on your premiums because it expects you’ll be less likely to file a home insurance claim.
- Don’t file small claims. Not making claims is a good way to receive a discount on your home insurance premiums. So if you have a minor claim, you might be better off not making it and instead see your insurance costs go down in subsequent years.
- Increase your deductible. As with all insurance policies, if you increase your deductible (the amount you must pay), your premiums will go down. Instead of having a deductible of $1,000 on your home insurance, raising that figure to $2,500 can meaningfully reduce your insurance costs. You’ll be responsible for a greater share of each claim but your premiums will decline.
- Shop for the best rates. The more you look around for a home insurance quote, the less you’ll ultimately pay. Comparison shopping will give you the lowest rate and save you a lot of money.
But wait, there's more
While the list above shows some of the most common ways to save money on home insurance, there are other things that also allow you to reduce your costs. Here are some other strategies to lower your home insurance premiums:
- Being a mature client. If you’re 55 or older, you may qualify for a discount on your home insurance.
- Pick a lower-risk neighbourhood. This is something to consider before you purchase a home. Some neighbourhoods have higher rates of insurance claims and insurance companies factor this in when setting premiums. It probably won’t be the only reason you move or don’t move to an area but it’s worth seeing what your insurance costs will be if you purchase in a particular neighbourhood.
- Get an automatic sprinkler. In the event of a fire, an automatic sprinkler system could save your house. So if you have one, an insurer may be willing to reduce your premiums since likelihood of filing a claim will decrease.
- Become mortgage-free. Don’t have a mortgage on your home? You might qualify for a discount.
- Ask for a discount. It never hurts to ask an insurance company if you might be eligible for savings. Even if it’s not mentioned, you may be able to qualify for a discount.
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