11 Ways to Save Money On Your Home Insurance
Now that you know the ins and outs of your home insurance policy, here are 11 ways you can pay less. In many cases, you can get the same level of coverage for fewer dollars.
- Upgrade your home— Insurers look at four key features of your house to see if these features are upgraded in your home. They usually do this for homes that are 20 years and older. These four features are: a newer 100 amp breaker panel; copper plumbing lines; newer shingles and a newer furnace. If you have upgraded these four things (Note: electrical and plumbing are the most important) you should qualify for preferred rate status with most insurers. This can translate into a 10% or even 15% savings on your insurance premium.
- Raise Your Deductible — The deductible is the amount you pay before insurance kicks in if you have a claim. For example, if you have a $500 deductible and you file a claim for $1,000 in damage to your home, you pay the first $500 and your insurer pays the balance, which is also $500. The higher your deductible is the less you pay for your policy. As an example, a $1000 deductible could save you as much as 12%-15%.Of course, you risk more out-of-pocket if you have a claim, but you save on your premium each and every year.
- New Is Better — Insurers really like newer homes. That’s because it’s less likely something will go wrong with the electrical, heating and plumbing systems. In addition, the structure itself is in better shape. Insurers offer discounts of 5% to as high as 15% if your residence is new.
- Location, Location, Location — Where do you live? If your home is near a fire station, you will pay less for your home insurance. If your neighborhood has fire hydrants you will pay less for your home insurance. If you live in an area that is prone to sewer back up, your carrier may charge a higher premium for that coverage. That will likely cost you additional dollars a year. Where you live will impact the cost of your home policy.
- Insure the House, Not the Land — Nobody is going to steal your land. Fire and high winds won’t “destroy” it. And your home policy doesn’t cover your land anyway. So, don’t include the value of your land when deciding how much insurance you need. we would be pleased to run a replacement cost check to determine what it will cost to rebuild your home – and other structures – if they’re destroyed. The market value of your land doesn’t matter; it is the building cost that is important. If you include the value of the land, you’re paying too much.
- Don’t Insure What You Don’t Have – If you have a tenant policy, it includes an automatic protection limit for your personal property. This amount IS adjustable. If you don’t need all that protection you can lower it to save some money. But be careful. You may also need more. Your agent should help you with a quick personal property calculation. This should be the cost to buy everything new, from cuttlery to clothes to furniture. Also, pay particular attention to items subject to special limits (as described above), items such as jewelry and computer equipment.
- Being Safe Pays You Back — Smoke detectors, burglar alarms and deadbolt locks are usually worth discounts of at least 5% on your home policy. You may get even bigger discounts, 15% to 20%, if you install a sophisticated sprinkler system or an alarm system that rings at the police station or a security company. However, not all of these systems qualify for discounts with all insurers. Before you install one, check with your insurer to find out what type of system qualifies for a discount and how much you would save on your premium if you installed the system.
- Where There’s Smoke . . . — There’s fire. Smoking (unattended cigarette butts, etc.) produces more than 2000 residential fires in Canada each year. That’s why some insurers have discounts if all the residents in a home are non-smokers.
- Don’t Jump Around — If you’ve been with an insurer for a while and you like that insurer, stay put. Some insurance companies automatically have loyalty discounts for policyholders who have been with the companies for a certain number of years. For example, 5% for at least three years, 10% for at least five years.
- Monitor Your Automatic Inflation Adjustment – Virtually every home policy includes an automatic inflation adjustment every year. This means the company automatically increases your Dwelling Limit every year. The idea is to keep up with the rising costs of rebuilding your home and make sure your insurance will completely rebuild your home. That’s a good thing! But over time this automatic inflation adjustment can get out of whack with reality. If you think your Dwelling Limit is too high, ask your agent to run a new replacement cost estimate. You may be able to lower your costs while still being fully protected.
- Good Credit = Lower Rates – Most companies these days use your credit history as part of their pricing structure. People with better credit will pay less for their insurance in most cases. So, not only is improving your credit rating a good idea by itself, it may also reduce the cost of your insurance
If you have questions on these money saving ideas or wish to check your elligibility for discounts, call the Winnipeg home insurance experts at Pembina Insurance Services today.