Matt Hands, VP, Insurance and MoneySense
Every homeowner should have a valid home insurance policy. 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.
We've compiled the research and summarized the results to finalize our comprehensive list of the best ways to save on your home insurance in Canada.
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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 quality insurance, but the flip side is that too much coverage lead to higher premiums. Not surprisingly, insurance companies will try to steer you towards the most expensive coverage, so compare quotes to understand what you do and don't need. For instance, look at your valuables to see if you have excessive coverage for certain things (e.g. electronics or jewellery).
Allow for a credit check
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(s)
As with all insurance policies, if you increase your deductible (the amount you must pay before the insurer pays the rest), 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.
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. This is also true with auto 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 the likelihood of filing a claim will decrease.
- Become mortgage-free. Don’t have a mortgage on your home? You might qualify for a discount. In fact, technically if you're mortgage-free, you don't need home insurance, but that's incredibly risky behaviour.
- 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.
Quit Smoking (or Never Start)
We all know that smoking is hazardous to our health. But did you know that you might pay higher home insurance premiums because of your bad habit? Not only does smoking hurt your home’s value, it only takes one lit cigarette to burn it down. Ask your home insurance provider if they offer a discount to non-smokers.
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Matt Hands, Business Director of Insurance
With 6+ years of experience at Ratehub.ca, Matt’s focus has been on growing its newest business unit, Insurance. He is a thought leader and a valuable resource to respected publications across Canada. read full bio
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