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.
For your free home insurance quote comparison, give us a call at 1-877-218-2008 or submit your quote online here