Your house
is your largest investment that's why you want to be sure it’s properly protected
without compromising your monthly budget. As both insurance brokers and
homeowners, we understand the importance of transparency and clarity in
insurance. Knowing exactly what you are covered for and how much you’re paying can seem just as difficult as solving a Rubik’s cube. It doesn’t have to be that
way. We polled our most experienced brokers to find out the best and most
effective way of bringing down your home insurance premiums. Here's their best advice to save money on your insurance:
1. Understand the difference between rebuild value and market value
Homeowner’s
insurance premium is largely based on your home’s rebuild value. Insurance actuarialists
and industry experts have spent years and a lot of resources developing rebuild
calculators that pull information based on your postal code, and a myriad of other factors in order to
calculate your home’s rebuild value, which is 98% accurate. Often times though,
clients will gasp at the rebuild value, stating that it will not be enough to
cover the home, and will then proceed to increase it, and as a result, premiums go up. Rebuild value is how much it
would cost to rebuild your home if it burned down or was totally destroyed.
This does not include any contents, you have separate coverage for this. Keep in mind, you already own the lot your house is on, and
this is not subject to market inflation. The cost to rebuild your home are things such as clearing debris, construction materials, labour, etc. The market value of the house is the
amount you paid for the house, and is based on market re-sale price. The latter
is often much more in cost.
Call your
broker or insurance provider and ask them to recalculate your home’s value. You
may be surprised over how much money you could save on your annual insurance
premium.
2. Roof updates
Did you
know the older your roof is, the more you’re paying for insurance? That’s
because the risk of environmental damages increases substantially when your roof ages. The chances of
water damage, ice damning, hail damage and other weather related events are
greater when your roof shows signs of wear and tear. If you have recently
updated your roof, let your broker or insurance provider know. You could save
hundreds on your insurance premium.
3. Update Fire Protection
Calgary and
other towns and cities in Alberta are expansive with new neighbourhoods popping up everywhere. When you
first purchased your home, you may have been in a new area that did not yet
have either a fire hydrant nearby or its own local fire station. Let your
broker or insurance agent know if you have either of these, and you could see
significant savings on your insurance policy.
4. Alarm Systems
Alarm
systems such as monitored security alarms, sump pump alarms or water detection
alarms will help you save money on your insurance because you are minimizing
your home’s risk of damage or theft.
5. Upgrades on plumbing, heating, hot water tanks, and electricity
The more
up-to-date your home is in terms of plumbing material, electrical wiring
(safety) and the age of your heating tanks, the more you will save on your
insurance. If you are renovating and updating any of the following, you may qualify
for better rates on your insurance.
6. Claims free discount
If you’ve
never made a claim on you house, you may qualify for a claims free discount. Be
sure to ask your broker or your insurance representative to see if they have
this discount.
7. Mortgage free discount
Paying off your mortgage is a huge achievement, but did you know you could get a better
rate for being mortgage free? Depending on your insurance provider, you can get
significant discounts if you do not have a mortgage on the house.
8. Check your deductibles
The higher
your deductibles, the less you have to pay in insurance premiums. Be realistic
about choosing your deductible. Make sure that you are able to pay that
deductible at any time if there is a loss on your home.
9. Lifestyle discount
Did you
know that if you are a non-smoker you qualify for better rates? Ask your broker
or insurance agent if they provide this discount.
10. Shop around for rates
It’s not a
bad idea to shop around with other insurance companies to see if there are
better rates available. Before you spend the time shopping around, make sure
you have a copy of your policy with you so you can compare apples to apples with other
quotes. Sometimes important coverage may be missing from your new quote which
may make it appear less in cost.
Sharp Insurance is Canada’s number one insurance
brokerage; we work with the largest insurance companies to provide our clients
with price comparisons.