Save on Home Insurance
Posted by Gail | Filed under Insurance
You might be surprised at how easy it is to save some money on your home insurance premiums. Just by shopping around online, you can identify an insurer who is offering a better deal. While you might have grown very comfortable with the insurance company or broker with whom you have been dealing, if you can save a couple of hundred bucks a year by shopping around, that’s nothing to sneeze at.
Your premiums will also go down if you choose a higher deductible. The standard deductible is $500. Since you’re unlikely to make an insurance claim for such a piddly amount, raise the deductible on your policy and add a little extra to your emergency fund to cover the difference.
Bundling home and vehicle insurance together could save you over $300. Hey, that’s worth the call to consolidate, isn’t it?
If you install a home security system, reducing the likelihood of theft or vandalism, you’ll likely get another discount on your premium. It could be as much as 15%, saving you about $200 a year. Of course, if the monitoring costs are more than $15 a month, you won’t save a thing.
If you and everyone else who lives in your home are non-smokers, that could save you money. Being claims free for five years or more can save you money. So can having a mortgage-free home or a home that’s less than 10 years old. And if you’re a retiree, that could mean even more savings.
Ask for a discount if you pay your annual premium all at once instead of monthly. With a little planning you can accumulate next year’s premium and grab even more savings.
If you have extra coverage on your policy to cover stuff that’s depreciated, make sure you adjust your coverage to reflect the depreciated value of the item(s) you’ve insured.
December 13, 2011 at 7:51 am
Our premiums are 6x the original amount from when we bought our house 17 years ago, which was brand new at the time. Wish I could say our house is worth 6x more! We shopped around last year, and this was the best deal then. If we had stayed where we were, we would have been paying 8x our original insurance costs! Crazy! Wish my salary went up by that amount too!
December 13, 2011 at 7:52 am
Like I said in an earlier post, our alarm system costs $447 a year and saves us $836 on our home insurance.
December 13, 2011 at 9:45 am
I recently did just what Gail is suggesting — I was shocked when our house insurance premiums had shot up a little over a year ago. I thought this is ridiculous and decided to shop around to see what else was out there for pricing. I was happy to find a that another insurance agency in our town was able to insure us with an equivalent policy but for $300 less!!! Before I left our current broker I went to them to show them the quote and asked if they would meet it. They answer was an abrupt “No”, hence, we have now switched our vehicle insurance as well as our home to our new brokers. It is definitely was worth it for us!
December 13, 2011 at 9:48 am
After 30 years of being with the same insurance company I shopped around and was able to get the same coverage, house and car combined, for about six hundred less per year. I should have made the move sooner but was comfortable with the people I had always dealt with. Both the old and new companies are highly reputable.
December 13, 2011 at 11:05 am
I keep trying to shop around… but the house is 105 years old and we have lead water lines coming in from the street. No one else wants to insure us. At least we’ve replaced all the knob & tube wiring, that was a huge red flag. I keep trying to tell the insurance company I live in a newer house, since my previous house was built in 1860- but they aren’t buying it
December 13, 2011 at 11:32 am
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December 13, 2011 at 1:15 pm
Great article Gail! I rate risks for home insurance so I thought I could lend some inside advise.
Always take a minimum $1000 deductible, as most people never file claims smaller than $1000 anyhow.
Check out the insurance companies monthly payment plan interest rate before putting it on your credit card (assuming you haven’t saved the cash.) The rates are usually around 3-4% with national insurers.
Find out about group discounts; there are huge discounts for Teachers, Legion members, AAA members, Nurses. Most unions usually partner with a company to offer discounts and companies will throw in extra things like travel insurance for free.
If you have someone over the age of 50 living with you, you might still be eligible for the seniors discount even if their not on title.
Change coverage forms to save big bucks; most brokers automatically sell the most comprehensive coverage but Broad form coverage generally offers the same protection for the house and only excludes things like mysterious dissapearence for jewelry etc… which might not be necessary coverage if you don’t have a lot of jewelry that is kept around the house. (ask your broker about this because coverage really varies with some companies.) This particular change could drop your premium by a lot ($500-$1000) if you own a home.
The only thing I disagree with above, is that you shouldn’t adjust your limits of coverage based on depreciation because insurance limits are based on what it what cost to REPLACE your stuff brand new in todays market. The only thing I would edit for is obsolete items that you no longer use which you wouldn’t replace anyhow.
December 13, 2011 at 2:45 pm
By shopping around, and increasing our deductible I found a better deal on insurance (with more comprehensive coverage!) for $300 less than I had paid the year before. Worth 1/2 hour of looking around for sure.
December 13, 2011 at 3:56 pm
Thanks a lot for very useful article and great tips!
I’d like to add that it’s also important not to relax after purchasing insurance. Almost all people I know after getting insurance forget about marketing research and extend their policies without comparing it with others. If you bought a cheapest insurance in town 5 years ago it doesn’t mean that you still have the one. “Tempora mutantur” and thanks to a high competition we all have a possibility to choose. You would need to invest some time for a new search. But guys, it can save you some money! And maybe enough to be able to buy something you want to! Besides you shouldn’t do everything yourself: ask your broker to check the market or look for insurance expert opinions. Last time I stumbled upon an article in Canadian Underwriter about a comparison tool for insurance (http://www.canadianunderwriter.ca/news/insureye-launches-online-consumer-insurance-spend-comparison-tool).
And let the thought about saving money inspire and motivate you!
December 13, 2011 at 4:42 pm
Oops, it seems that I copied a wrong link. Here is the right one: http://www.canadianunderwriter.ca/news/insureye-launches-online-consumer-insurance-spend-comparison-tool/1000714065/
December 13, 2011 at 5:42 pm
Good article Gail. The only thing that I would suggest from what you’ve said above is to not reduce coverage for depreciated items if the policy provides replacement cost coverage as many policies do. Replacement cost coverage allows you to replace your belongings with new items. As Gail’s tv show TTDUP has shown us, the resale value on belongings whether it’s clothing, furniture or home entertainment systems is quite low compared to the new retail costs. Replacement cost coverage allows policy holders to to replace lost belongings (be it from fire, theft or another insured peril) with new items. I certainly don’t have many clients who would be impressed with having to locate used furniture and belongings after a fire because of a depreciated claims settlement. Use caution in this area and make sure you know not only what your policy covers, but how the claims settlement would be handled (replacement cost vs. depreciated cost).