Cut Your Home Insurance Costs

Floods, ice storms and violent thunderstorms have resulted in an avalanche of insurance claims in Ontario. The December ice storm in 2013, for example, resulted in $200 million in insured losses, according to the Insurance Bureau of Canada. The Toronto flooding earlier that year had already cost $940 million in losses, making 2013 a record year for insurance payouts.

With such record-breaking losses, it is safe to say that premium increases will not be far behind. But there are steps homeowners can take to reduce the cost of insuring their most valuable asset – their home.

Raise the deductible – Increasing the standard $500 deductible to $1,000 or even $2,500 can substantially reduce your home insurance premiums.

Install a security system – Installing a monitored home security system can result in a discount of up to 15 per cent on your home insurance costs.

Buy home and auto from the same insurer – Bundling your home insurance with auto, boat, business and other insurance needs can result in savings on premiums.

Know what you are insuring – Do an inventory of your possessions and their replacement cost. There are a number of free smart-phone apps that make it easy to record a video inventory, such as the Canadian app, Encircle, or the Know Your Stuff Home Inventory app from the Insurance Information Institute. Keep in mind that replacement value insurance will cost more but will be worth it in the event of a claim.

Check that you are not over-insured – Your home should be insured for the cost of rebuilding, which could be more or less than the market value of your home. Insure your home for the value of the structure and outbuildings, not the land value.

Pay annually rather than monthly or quarterly. There is usually an administration charge added when your premium is paid in instalments.

Ask what discounts are available – If you have been claim-free for a number of years, if you are a retiree, if your home is 10 years old or less, if your mortgage is paid off, or if you are a long-time customer, you might qualify for a discount from your insurer.

Prevention pays – Installing a sump pump, installing a backwater valve to prevent sewer backups, finishing the basement – all could qualify you for a discount on your home insurance premiums.

Courtesy: Homeservice Club