How to get cheap home insurance
The cost of home insurance is on the rise due to heavy rate increases, underpricing, and extreme weather events like flooding. While proper home maintenance in the fall and winter can reduce your need for a claim, there are other factors that could drive up your premium beyond your control. However, there are several methods to make sure your home insurance premiums stay low.
Here are 11 ways you can get cheap home insurance.
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Get online home insurance quotes
It’s quick and easy to get home insurance quotes online. It’s also free, so why not. You can use it to compare home insurance from multiple providers, see who offers the lowest price and the best value.
Request a credit check
If you have a good credit score, let your home insurance provider check it for themselves. Insurance companies believe (and may have stats to prove it), people that know how to manage their credit are less likely to file a fraudulent claim. If you don’t know your credit score, you can get your free credit score here.
Increase your deductible
A deductible is the portion you pay before your insurer pays the rest. Your insurance policy covers you for risks that, under normal circumstances, you wouldn’t want to end up paying for yourself. Your deductible amount helps keep your premium low by weeding out frivolous or fraudulent claims. A deductible allows both you and your insurer to share the risk. If you increase your deductible, it furthers your trustworthiness to your insurer and may qualify you for a discount. Typical deductibles are $500-$1,000, but if you can afford it, going as high as $2,500 (meaning you won’t claim anything less than that) can save hundreds a year.
Bundle with your car insurance
Obviously, the best car insurance companies in Canada want you to do this because it’s more business for them, especially if you remain loyal. You can save 10% on your home insurance if you combine it when your auto insurance. You could also see another 10-15% savings on your car insurance premium. Make sure you’re comparing apples to apples though if you’re bringing your car insurance over. Know your deductibles and coverages and make sure they are the same, so you know if you’re getting a deal.
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Get an alarm system
Unfortunately, smart home alarm systems don’t yet reduce your home insurance. But, if you get an alarm system connected to a central system (Rogers, Chubb, ADT, Alarm Force), you could save another 10% on your home insurance. A wifi doorbell camera is a deterrent, but the video is only useful if the quality is there, and you’re able to tie it to the event. A dedicated alarm system notifies the authorities immediately – that’s what the home insurance companies want to see to qualify for a discount.
Opt for one annual payment, if you can afford it.
If you can afford to pay one lump sum to your insurance provider, you’re effectively reducing any administrative costs. If you save them money, they’ll often reward you with savings too. However, don’t let your insurance lapse and miss a payment. Doing so could cause your premiums to go up and put you in a bad situation when you need to make a claim.
Audit your belongings
Don’t let an insurance company replace your valuables with cheaper substitutes. If you want them to replace what you own, or a newer version of the same thing, keep your receipts, take photos, and reassess every year. An annual content audit is essential to know what you have, but also their value. If you initially took out extra bike insurance for your high-end road bike five years ago, the bike is not worth the same anymore. It may not need the extra add-on or “endorsement,” and you could remove it from your policy. Know and understand your content limits. For instance, if you have a lot of rings, earrings, and necklaces – most home insurance providers set a standard threshold for jewellery insurance, let’s say around $2,500. If you have more, consider taking out the add-on/endorsement for those precious items.
Check out Encircle – they offer a free content audit app to store images, models, and serial numbers.
Make only necessary claims
Often, making a claim is worth it, especially if the amount you need far exceeds your deductible. However, if your deductible is $1000 and your stolen laptop is 5-years-old, it’s worth replacing the computer on your own to avoid a rise in premiums. Also, there can be a 10-20% savings in claims-free discounts.
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Reduce your coverage
Most homeowners will choose comprehensive coverage. It’s the easy, go-to, default solution to ensure coverage in all scenarios. However, there are three types. Basic covers your “named perils” otherwise known as things for which you explicitly want coverage. For instance, you could say you want protection from fire, but not water. If you do this and experience a flood, don’t expect any reimbursement.
Broad coverage protects the house and its contents but typically comes with many exclusions (scenarios where they won’t cover you). It also only insures the materials that you name on the policy.
A basic or broad policy will reduce your premium, but make sure to understand your risks fully.
Get appropriate home insurance coverage
Yes, I know you want to get cheap home insurance, but it’s vital to be covered appropriately. Are you renting out your space with Airbnb or privately? Tell your insurer, they need to know all the risks associated with your house. If you have a renter, ask them to get tenant’s insurance because If someone injures themselves in their space, they’ll be liable, not you. But, you don’t want to deal with that mess or the fallout because you didn’t inform your tenant. If your tenanted basement floods and valuables are damaged, that’s on their policy to replace the items, not yours.
Switch, don’t cancel
Home insurance isn’t mandatory, but your lender wants it. The select few who own their home outright can go without, but that’s a significant risk. Home insurance protects you from fire, water, theft, and vandalism. But, even if you live in an area with perfect weather and zero theft, there is still what’s called third party liability. Third-party liability is protection if someone sues you injuring themselves on your property. If you’re mortgage-free, keep the insurance, switch to a cheaper provider. If you lapse, your premiums could soar.
The Bottom Line
Whenever you shop online for insurance, know the rates presented to you are not final; they do not include a lot of these potential savings. Once you’ve chosen a provider, ask for discounts, ask how you can save. The above tips are universal for any provider. They aren’t unique. Each provider may offer loyalty, union, and other forms of discounts of which you should take advantage.
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