Home Insurance Savings Tips
Your dwelling is often your most precious asset that you need to protect. We created a list of all savings opportunities associated with Home insurance.
This list is the most complete perspective on home insurance savings tips. Numerous insurance brokers contributed to this list. So, let’s start!
- Change your content coverage: Renting a Condo? You can often lower your content coverage. No need to insure your belongings to up to $250,000 if you only have a laptop and some IKEA furniture!
- Renovations: Renovating your house can result in lower home insurance premiums, as home insurance premiums for older, poorly maintained dwellings are usually higher. Additionally, renovating only parts of your dwelling (e.g. the roof) can lead to insurance savings.
- Pool: Adding a swimming pool to your house will likely lead to an increase in your insurance rates since your liability ( e.g. the risk of someone drowning) and the value of your house have increased.
- Pipes: Insurers prefer copper or plastic plumbing – maybe it is a good idea to upgrade your galvanized / lead pipes during your next renovation cycle.
- Shop around: Search, Compare, and switch insurance companies. There are many insurance providers and their price offerings for the same policies can be very different, therefore use multiple online tools and talk to several brokers since each will cover a limited number of insurance companies.
- Wiring: Some wiring types are more expensive or cheaper than others to insure. Make sure you have approved wiring types, and by all means avoid aluminum wirings which can be really expensive to insure. Not all insurers will cover houses with aluminum wirings, and those that would, will require a full electrical inspection of the house.
- Home Insurance deductibles: Like auto insurance, you can also choose higher home insurance deductibles to reduce your insurance premiums.
- Bundle: Do you need Home and Auto Insurance? Most companies will offer you a discount if you bundle them together.
- New Home: Check if insurer has a new home discount, some insurers will have them.
- Claims-free discount: Some companies recognize the fact that you have not submitted any claims and reward it with a claim-free discount.
- Mortgage-free home: When you complete paying down your house in full, some insurers will reward you with lower premiums.
- Professional Membership: Are you a member of a professional organization (e.g. Certified Management Accountants of Canada or The Air Canada Pilots Association)? Then some insurance companies offer you a discount.
- Seniors: Many companies offer special pricing to seniors.
- Annual vs. monthly payments: In comparison to monthly payments, annual payments save insurers administrative costs (e.g. sending bills) and therefore they reward you lower premiums.
- Annual review: Review your policies and coverage every year, since new discounts could apply to your new life situation if it has changed.
- Alumni: Graduates from certain Canadian universities ( e.g University of Toronto, McGill University) might be eligible for a discount at certain Insurance providers.
- Employee / Union members: Some companies offer discounts to union members ( e.g. IBM Canada or Research in Motion)
- Mortgage insurance: Getting mortgage insurance when you have enough coverage in Life insurance is not always necessary: mortgage insurance is another name for a Life/Critical Illness / Disability insurance associated with your home only but you pay extra for a convenience of getting insurance directly when lending the money. For example a Term Life policy large enough to pay off your home is usually cheaper.
- Drop earthquake protection: In many regions, earthquakes are not likely – you could decide not to take earthquake coverage which could lower your premiums. For example, in BC earthquake coverage can account for as much as one-third of a policy’s premium.
- Wood stove: Choosing to use a wood stove means higher premiums – Insurance companies often decide to inspect the houses with such installations before insuring them. A decision to get rid of it means a lower risk and thus lower insurance premiums.
- Heating: Insurers like forced-air gas furnaces or electric heat installations. If you have an oil-heated home, you might be paying more than your peers who have alternative heating sources.
- Bicycle: You are buying a new bicycle and thinking about getting extra protection in case it is stolen when you leave it on the street e.g. when doing your groceries? Your Home insurance might be covering it already.
- Stop smoking: Some insurers increase their premiums for the homes with smokers as there is an increased risk of fire.
- Clean claim history: Keep a clean claim record without placing small claims, sometimes it makes sense to simply repair a small damage rather than claim it: you should consider both aspects: your deductibles and potential raise in premiums.
- Rebuilding vs. market costs: Consider your rebuilding costs when choosing an insurance coverage, not the market price of your house (market price can be significantly higher than real rebuilding costs).
- Welcome discount: Some insurers offer a so called welcome discount.
- Avoid living in dangerous locations: Nature effects some locations more than others: avoid flood-, or earthquake-endangered areas when choosing a house.
- Neighbourhood: Moving to a more secure neighbourhood with lower criminal rate will often considered in your insurance premiums.
- Centrally-connected alarm: Installing an alarm connected to a central monitoring system will be recognized by some insurers in premiums.
- Monitoring: Having your residence / apartment / condo monitored 24 hour can mean an insurance discount. e.g. via a security guard.
- Hydrants and fire-station: Proximity to a water hydrant and/or fire-station can decrease your premiums as well.
- Loyalty: Staying with one insurer longer can sometimes result in a long-term policy holder discount.
- Water damages: Avoid buying a house which may have water damage or has a history of water damage; a check with the insurance company can help to find it out before you buy the house.
- Decrease liability risk: Use meaningful ways to reduce your liability risk (e.g. fencing off a pool) and it can result in your liability insurance premiums going down.
- Direct insurers: Have you always dealt with insurance brokers / agents? Getting a policy from a direct insurer (i.e. insurers working via call-center or online) often can be cheaper (but not always) since they do not pay an agent/broker commission for each policy sold.
- Plumbing insulation: Insulating your pipes will prevent them from freezing in winter and reduce or even avoid insurance claims.
- Dependent students: Dependent students living in their own apartment can be covered by their parents’ home insurance policy at no additional charge.
- Retirees: Those who are retired can often get an additional discount – since they spend more time at home than somebody who works during the day and thus can prevent accidents like a fire much easier.
- Leverage inflation: Many insurers increase your dwelling limit every year by considering the inflation of the house rebuilding costs. Make sure this adjustment is in line with reality and that you are not overpaying.
- Credit score: Most companies use your credit score when calculating home insurance premiums. Having a good credit score can help you to get lower insurance rates.
- Stability of residence: Some insurers may offer a stability of residence discount if you have lived at the same dwelling for a certain number of years.
Tips and Tricks to Enjoy Cheap Home Insurance Quotes
Tips and Tricks to Enjoy Cheap Home Insurance Quotes:
A few decades ago, who could have thought that shopping for homeowners insurance could become so easy? Gone are the days when one had to spend hours together roaming to different insurance companies, calling them over and over again just to compare a few quotes from two or more of them. Online insurance shopping has made it very much convenient for the shoppers to sit in the comfort of their homes and compare quotes from various companies to find cheap homeowners insurance. One can easily back away from all the hassle and get hundreds of quotes, both from local and national insurance companies by simply giving away a few details.
With this said, some people may not really like to give away information online to look for cheap home insurance, because some tools ask for personal credentials as well. But, one need not worry about this issue anymore, because online tools these days just ask for the shopper’s zip code and that’s it, a whole list of quotes from well-known insurance companies from over 50 States will appear on the screen. This method of online shopping to search for cheap home insurance quotes is easy, quick and above all it is free.
Getting the best and cheap home insurance is something that every online shopper looks for. But in search for cheaper home insurance quotes, one should not miss the actual benefit of having homeowners insurance. A full coverage home insurance is a protection for one’s home and the property within it. Hence, comparing insurance quotes simply based on their cheap rates is not worth it. One should be clever enough to identify affordable quotes that provide complete benefits of having a home insurance rather than just opting for some cheap homeowners insurance quotes that are not really worthy.
But one need not think that in order to avail a full coverage home insurance, one will have to pay too much of premiums. It is definitely possible to enjoy low cost homeowners insurance and at the same time get a decent coverage plan. In order to choose cheap homeowner insurance quotes, one must first be aware of what are the different types of coverage plans available and then finally decide on one that suits their needs the best.
What is Covered Under a Homeowners Insurance Policy?
According to Insurance Information Institute (III), homeowners insurance is divided into different categories, which are denoted as HO-1, HO-2, HO-3, HO-4, and so on until HO-8. Of all these policies the first type, i.e. HO-1 is no longer available as it provides very basic coverage scheme. The other policies are discussed below:
HO-2 and HO-3: These two policies are the most prevalent ones. The HO-2 policy is also known as ‘broad-form policy’ and HO-3 as ‘special-form policy’. People having these types of coverage can claim for money in any of the following 16 situations:
- Damage caused due to current shocks generated artificially.
- Unexpected damage caused due to aircraft
- Vehicle rampages that damage the house
- Damage due to falling objects
- Damage to the house due to heavy snowfall, ice or due to the weight of sleet
- Lightning or fire blasts
- Damage due to Volcanoes
- Windstorm damages
- Unpredictable blasts
- Damage caused due to excessive smoke
- Malicious mischief
- Loss of possessions due to stealth/theft
- Damage to the house or other possessions due to riots or rallies
- Accidental damage such as cracks or swollen appearance of appliances such as air conditioners, water heaters, and fire-protectors.
- Damage caused to home appliances due to extreme cold weathers resulting in their freezing.
- Damages due to steam or water leakage from water heaters, air conditioners, fire-protectors or other appliances.
While both HO-2 and HO-3 provide coverage for damages caused due to above 16 issues, but there is a small difference that makes one more advantageous over the other. The HO-2 policy does not provide coverage for damages apart from the above list. Whereas, the HO-3 policy not only covers the above-listed damages, but will also provide coverage for any other type of damage as well, except a few natural disasters such as earthquakes, floods, and other severe issues such as nuclear disasters, wars, and pests.
HO-5: This policy is similar to HO-3, but with an extension that it provides coverage for one’s possessions in the house as well.
HO-4: This policy is special in the fact that it provides coverage for renters.
HO-6: Coverage for condo owners can be availed by opting for this policy.
HO-7: If one is in search of cheap mobile home insurance, then the HO-7 policy is the right choice.
HO-8: If the house one lives in is an old construction, then choosing HO-8 policy will help them to avail cheap home insurance.
What damages are not covered?
The following are the damages that are not covered by any type of home insurance and require separate policies for protection:
â Sewage damages
â Damages due to negligence
â Damages due to pests
How to Calculate Home Insurance?
Another important element to finding affordable homeowners insurance is to know how much insurance one would actually need.
This estimation will help the homeowner to have an idea of the cost for damages or loss of possession; he/she can face in case of any calamity and then appropriately judge the amount of home insurance one should avail. Here are the basic steps using which one can estimate one’s home insurance: