More Ways to Save: The Price of Home Insurance & How to Save
Home insurance may not be a legal obligation in most provinces; however, it can spare you and your family from potential financial devastation if something were to happen to your biggest asset and investment: your home. Home insurance is more than just “another bill to pay” – it’s crucial protection and essential peace of mind so that you can live your life and make new memories without worry.
You may not have known it, but homeowners’ insurance can actually differ by hundreds of dollars depending on the provider you buy from, the discounts you are eligible for, and a variety of other factors. Seriously – there’s a lot of things to consider.
There are a few strategies you can assess if the cost of home insurance is something that worries you, ensuring that your coverage remains affordable while still covering all that you and your family need it to. We will break down the best strategies for you.
Remember that location matters.
Before you purchase your home, you may want to consider the cost of your homeowners’ insurance. Homes closer to fire hydrants or fire stations are more likely to receive a quicker response in the event of a disaster and insurance providers will factor in your risk when determining your rates. Does the area where you are considering purchasing a home experience a lot of earthquakes? You will want to ensure the foundation of your potential home is built to withstand this kind of event.
High crime rates and flood-prone areas will also increase your premiums. For the latter, you may have to pay for an additional coverage plan that protects against floods – which could add considerable costs to your policy. Neither floods nor earthquakes are covered in a typical homeowners’ insurance policy.
The small choices you make (if made correctly) while you are still in the process of purchasing your home can seriously cut back on your premiums– even up to 15%. Besides location, there are some changes and decisions you can make that will help you reduce your rates, such as:
Raising your deductible
Consider how much money you could afford to spend in the event that something unexpected happens. With this amount in mind, you could decide to raise your existing deductible amount. The higher your deductible is, the lower your insurance premiums. Of course, you will need to remind yourself that this is the amount you will have to pay out before your provider steps in to cover the rest so you should choose a number that is realistic for you and your family’s financial circumstances.
Bundle your auto and home insurance
Many providers will offer multi-line discounts, meaning that if you have previously purchased automobile insurance through them then you may qualify for a discount by also having home insurance. This can also seriously save on some headaches when it comes to organization and payments.
Install home security and safety features
You may be offered small discounts of around 5% for the installation of dead-bolt locks, burglar alarms, and other home security systems. Other sophisticated systems – fire alarms and sprinkler systems that contact their respective monitoring stations – may award a homeowner a discount of up to 15% (depending on the provider they are insured through.) These systems are not inexpensive, however – and not every model or make will qualify the homeowner for a discount. For these situations, you will want to consult with your insurance broker or provider beforehand to see if you would actually save by purchasing these systems.
Review your existing coverage.
One of the best ways to ensuring that your insurance is kept affordable is by reviewing your needs and comparing them with what your policy protects you for. Do these reflect your existing needs? If your situation changes, you will want to discuss with your broker. For example, if you plan to leave your home vacant for thirty days or longer, you may want to inform your broker as your existing home insurance could be voided. Some options for avoiding this would be to have a home-sitter or apply for a vacancy permit with your home insurance company.
Does your home insurance cover any modifications you have made to your home or luxury items, such as your pool, hot tub, etc.? If you have recently made an upgrade, you will want to contact your provider to inform them of the changes made.
Review the value of your possessions.
As your homeowners’ insurance likely includes coverage for your belongings, you may want to review the existing limits in your policy annually and assess whether they still match the value of your possessions. If you have a floater and your high-value items are no longer worth the same amount due to natural wear and tear, you can opt to reduce or even cancel this extra insurance altogether. You don’t want to have to pay for coverage you will end up not needing.
Look after your home.
Your home is likely your family’s biggest investment. Look after it! Regularly reviewing the function of your home’s systems (electrical, plumbing, heating, ventilation, etc.) or hiring a professional to do it for you can ensure that your home stays as up-to-date as possible and lessens your risk for damages, rupture, or failure causing loss. “Modernizing” these systems may reduce your risk further. Your home’s windows and roofs should also be regularly inspected (or, again, hire a professional to do it for you!) to ensure they are still able to withstand the kind of weather that your area experiences. If your location tends to see high winds or hail, your home’s structure should reflect this and be reinforced accordingly.
It should also be noted that the land beneath your home is not at risk for most of the perils that your home itself would normally face. You should not include the value of the land when you are determining how much coverage to purchase, or you may end up paying for far more than you should. Rebuild cost is not the same as the market value of your home.
Finally, a broker is one of your best resources when it comes to saving on any of your insurance plans. They will offer you ways to save without making you feel like you have to cut corners in order to fit within your allotted budget. Talk to your Excalibur Insurance Broker today at 1-888-298-7343, or get a quote today.