8 ways to save on home insurance
Many people don't even think of trying to reduce their home insurance,
according to one insurance agent.
"Most homebuyers don't even question it. They
simply sign the cheque once a year and that's it," says John
Gelston, chief broking officer for Hunter Keilty Muntz and Beatty
That's a shame because there are many ways you can
save on your home insurance. While many agents review most of these
options with you before you buy, some discounts kick in after a
few years, unbeknownst to you.
But according to our experts, all you have to do is
ask, and you may be eligible for a better rate than you expected.
Opt for a higher deductible
If you increase your deductible above the $500 norm, you can receive
a discount. How much you'll save varies from company to company
and province to province. But you should save about 10 percent on
your premiums for every $500 increase, says Geraldine Bailey, senior
account manager for Canadian Brokerlink in Toronto.
That's because when you pay a higher deductible, you
save the insurance company money: "When we assign an adjustor
to a $1,000 claim, they spend about the same amount of time on a
large claim as they do on small claims," she says.
Increasing your deductible has the most benefit on
bigger policies. This option "isn't good for small policies
around $300, but when you're looking at insuring a $400,000 to $600,000
home, with a cottage, and pay a premium of $2,700 a year, that's
a good savings," says Bailey.
Buy a brand new home
If you buy a new home, you'll get a discount of between 15 and 25
percent off your regular premium. The idea is the chance of making
a claim on a new home versus an older home is much lower.
"The discount decreases [once] your house is
five years old, but remember, some companies won't offer this,"
so you have to ask for it, says Bill Blaney of Bill Blaney Insurance
in Dorchester, Ont.
Avoid making claims
Most policies come with a claims-free discount of about 10 percent.
However, you must go three years without filing a claim in order
to receive it. So, ask yourself, is making a claim for a $200 repair
today worth losing a $50 or $60 credit for each of the next five
years? You may be better off paying for small repairs yourself so
you're able to get the discount later.
Ask for the senior's rate
Some insurance companies offer discounts to senior citizens, often
as much as five or 10 percent. "Some companies consider you
a senior as young as 50, other insurance companies wait till 65
or older," says Gelston.
So, you should always ask if there's a mature rate.
"Unlike auto insurance, there is no way on a home insurance
application to tell how old you are. There isn't a birthday [line]
on your application," he says.
Choose your neighbourhood wisely
Insurance costs are higher if you live outside a fire-hydrant-protected
area since it takes longer for fire trucks to reach you, increasing
the likelihood of damage to your home and a bigger claim.
You get the best rate for living within 10 minutes
of a fire hydrant. If you're within 10 kilometres of one, you get
the next-best rate. But if you're outside that 10-kilometre zone,
you're considered unprotected. And that's when your premiums get
Having your auto insurance and your house insurance with the same
company can also reduce your home insurance.
"Insurance companies cannot force you to do that,
but they do offer a discount for it," says Blaney, often in
the neighbourhood of 10 percent. However, if you insure your house
and cottage with the same company, there is no discount.
Buy a monitored alarm system
"We encourage our customers to put in larger alarm systems,"
A good system with 24-hour monitoring will run you
about $25 a month and get you a 10-percent discount on your insurance.
The security company will issue you a certificate outlining your
coverage, which you then show the insurance company.
If the house is not monitored, but there is a security
system, you may be eligible for a discount of up to five percent,
Stay in one place
If you live in the same home for three years or more, you are eligible
for a discount of about five percent. But if you've lived in the
same home for 20 years and then move, all bets are off. "You
only get the stability discount while you're in the same home; it's
very confusing that way," says Bailey.
That's why she says the key to savings is a good insurance
broker. "Once you're on the books, it really is the responsibility
of the broker to make you aware of any discounts or any that they
might be able to come up with," she says. So be sure you're
working with a good broker. If you need to find one, check with
friends, family and co-workers for references.
Melanie Chambers is a writer
in London, Ont.