40+ Home Insurance Savings Tips

Your dwelling is often your most precious asset that you need to protect. We created a list of all savings opportunities associated with Home insurance. This list is the most complete perspective on home insurance savings tips. Numerous insurance brokers contributed to this list. So, let’s start!

1. Change your content coverage: Renting a Condo? You can often lower your content coverage. No need to insure your belongings to up to $250,000 if you only have a laptop and some IKEA furniture!

2. Renovations: Renovating your house can result in lower home insurance premiums, as home insurance premiums for older, poorly maintained dwellings are usually higher. Additionally, renovating only parts of your dwelling (e.g. the roof) can lead to insurance savings.

3. Pool: Adding a swimming pool to your house will likely lead to an increase in your insurance rates since your liability ( e.g. the risk of someone drowning) and the value of your house have increased.

4. Pipes: Insurers prefer copper or plastic plumbing – maybe it is a good idea to upgrade your galvanized / lead pipes during your next renovation cycle.

5. Shop around: Search, Compare, and switch insurance companies. There are many insurance providers and their price offerings for the same policies can be very different, therefore use multiple online tools and talk to several brokers since each will cover a limited number of insurance companies.

6. Wiring: Some wiring types are more expensive or cheaper than others to insure. Make sure you have approved wiring types, and by all means avoid aluminum wirings which can be really expensive to insure. Not all insurers will cover houses with aluminum wirings, and those that would, will require a full electrical inspection of the house.

7. Home Insurance deductibles: Like auto insurance, you can also choose higher home insurance deductibles to reduce your insurance premiums.

8. Bundle: Do you need Home and Auto Insurance? Most companies will offer you a discount if you bundle them together.

9. New Home: Check if insurer has a new home discount, some insurers will have them.

10. Claims-free discount: Some companies recognize the fact that you have not submitted any claims and reward it with a claim-free discount.

11. Mortgage-free home: When you complete paying down your house in full, some insurers will reward you with lower premiums.

12. Professional Membership: Are you a member of a professional organization (e.g. Certified Management Accountants of Canada or The Air Canada Pilots Association)? Then some insurance companies offer you a discount.

13. Seniors: Many companies offer special pricing to seniors.

14. Annual vs. monthly payments: In comparison to monthly payments, annual payments save insurers administrative costs (e.g. sending bills) and therefore they reward you lower premiums.

15. Annual review: Review your policies and coverage every year, since new discounts could apply to your new life situation if it has changed.

16. Alumni: Graduates from certain Canadian universities ( e.g University of Toronto, McGill University) might be eligible for a discount at certain Insurance providers.

17. Employee / Union members: Some companies offer discounts to union members ( e.g. IBM Canada or Research in Motion)

18. Mortgage insurance: Getting mortgage insurance when you have enough coverage in Life insurance is not always necessary: mortgage insurance is another name for a Life/Critical Illness / Disability insurance associated with your home only but you pay extra for a convenience of getting insurance directly when lending the money. For example a Term Life policy large enough to pay off your home is usually cheaper.

19. Drop earthquake protection: In many regions, earthquakes are not likely – you could decide not to take earthquake coverage which could lower your premiums. For example, in BC earthquake coverage can account for as much as one-third of a policy’s premium.

20. Wood stove: Choosing to use a wood stove means higher premiums – Insurance companies often decide to inspect the houses with such installations before insuring them. A decision to get rid of it means a lower risk and thus lower insurance premiums.

21. Heating: Insurers like forced-air gas furnaces or electric heat installations. If you have an oil-heated home, you might be paying more than your peers who have alternative heating sources.

22. Bicycle: You are buying a new bicycle and thinking about getting extra protection in case it is stolen when you leave it on the street e.g. when doing your groceries? Your Home insurance might be covering it already.

23. Stop smoking: Some insurers increase their premiums for the homes with smokers as there is an increased risk of fire.

24. Clean claim history: Keep a clean claim record without placing small claims, sometimes it makes sense to simply repair a small damage rather than claim it: you should consider both aspects: your deductibles and potential raise in premiums.

25. Rebuilding vs. market costs: Consider your rebuilding costs when choosing an insurance coverage, not the market price of your house (market price can be significantly higher than real rebuilding costs).

26. Welcome discount: Some insurers offer a so called welcome discount.

27. Avoid living in dangerous locations: Nature effects some locations more than others: avoid flood-, or earthquake-endangered areas when choosing a house.

28. Neighbourhood: Moving to a more secure neighbourhood with lower criminal rate will often considered in your insurance premiums.

29. Centrally-connected alarm: Installing an alarm connected to a central monitoring system will be recognized by some insurers in premiums.

30. Monitoring: Having your residence / apartment / condo monitored 24 hour can mean an insurance discount. e.g. via a security guard.

31. Hydrants and fire-station: Proximity to a water hydrant and/or fire-station can decrease your premiums as well.

32. Loyalty: Staying with one insurer longer can sometimes result in a long-term policy holder discount.

33. Water damages: Avoid buying a house which may have water damage or has a history of water damage; a check with the insurance company can help to find it out before you buy the house.

34. Decrease liability risk: Use meaningful ways to reduce your liability risk (e.g. fencing off a pool) and it can result in your liability insurance premiums going down.

35. Direct insurers: Have you always dealt with insurance brokers / agents? Getting a policy from a direct insurer (i.e. insurers working via call-center or online) often can be cheaper (but not always) since they do not pay an agent/broker commission for each policy sold.

36. Plumbing insulation: Insulating your pipes will prevent them from freezing in winter and reduce or even avoid insurance claims.

37. Dependent students: Dependent students living in their own apartment can be covered by their parents’ home insurance policy at no additional charge.

38. Retirees: Those who are retired can often get an additional discount – since they spend more time at home than somebody who works during the day and thus can prevent accidents like a fire much easier.

39. Leverage inflation: Many insurers increase your dwelling limit every year by considering the inflation of the house rebuilding costs. Make sure this adjustment is in line with reality and that you are not overpaying.

40. Credit score: Most companies use your credit score when calculating home insurance premiums. Having a good credit score can help you to get lower insurance rates.

41. Stability of residence: Some insurers may offer a stability of residence discount if you have lived at the same dwelling for a certain number of years.

Learning About Life Insurance Plans

For most individuals who opt for a life insurance plan, it is an integral part of making sure they have some financial security in their lives. Insurance is one of the most widely used security tools on the market. The premiums that these individuals have to pay towards these insurance plans are based on a number of factors. They often include the following factors:

1. Gender of the individual
2. Age of the individual
3. Hobbies of the individual
4. Quality of life of the individual
5. Profession of the individual
6. Medical history of the life assured etc.

Hundreds of people all over the world benefit from different insurance plans. Individuals who belong to various age groups and different walks of life will probably buy life insurance at some point during their lives. The various groups that buy insurance fall under these groups:

a) Single parents
b) Couples married or unmarried with a mortgage or other debts
c) Couples married or unmarried with children
d) Single people with a mortgage or debts etc.

Some of the different kinds of insurance are:

1. Variable life – Individuals can select from a wide range of investment products long with stock funds.

2. Term insurance – This insurance policy includes buying coverage for a particular tenure and for a specific amount. If the individual who has bought this plan dies during the insurance tenure, the beneficiary will receive the value of the policy. This type of investment does not include any investment coupon. The term insurance is the simplest form of the different insurance types available to individuals.

3. Universal life – Individuals who opt for this insurance policy get to decide how much the premium should be. The insurance company selects the investment option for the individuals, which might include bonds or mortgages. The amount of investment along with the return on the investment is deposited in a cash value account. The type of universal life insurance where an individual can select his or her own investment tools is known as a universal variable life plan.

4. Whole life insurance – This type of insurance plan is more or less like the term insurance plan. The only difference is that of the tenure. Due to the prolonged tenure, the premiums remain stable throughout the duration of the policy.

There are many benefits for opting for different types of life insurance plans. These advantages include:

a) The insurance policies secure the future of the spouse and children.
b) These plans can be used to pay for estate taxes and other settlement amounts.
c) The cash value policies are tax deferred, which means individuals will not be required to pay tax against this amount until the time they withdraw funds from the policy.

Loyalty Doesn’t Pay

I had a conversation with a friend the other day that gave me inspiration for this topic. My friend, who I will call an loyalist, said “I have been with my for 52 years. When I call they jump.” We discussed this belief for a little while as I wanted to get a little more insight from his perspective. For the purpose of this week’s topic, it is coming from the perspective of being in CA, considering CA insurance law. If you are from another state, your laws may be different, and I am not an attorney so this is not legal advice.

In 1988 California voters passed Prop 103, which was a insurance reform proposition. It is my understanding that this law, while primarily focused on regulating rates, protects insurance consumers by preventing the use of discriminatory tactics by insurance companies. What this means is that insurance companies have to treat a 1 day customer, with the same service as a 52 year customer. If the gives preferential service to the older customer over the newer customer they are subject to penalties and fines if the Department of Insurance were to investigate complaints of this nature. Typically the penalties far exceed the value of any client, so insurance companies do not waiver in their treatment of their customers regardless of tenure. So for my friend, while the company may listen a little more politely, their policy for him is the same as a new customer. If they jump for him, they jump for everyone. As an insurance shopper, just know that your treatment is the same no matter how long you are with a specific company.I am not privy to the world of corporate leaders, but I would bet in the boardrooms, and executive meetings, the opposite of ‘jumping’ is the case. Given how much insurance companies study the business for profit, I would bet loyalist customers are the most profitable customers for insurance companies. Once the insurance loyalist is set in their comfort zone, they can be taken advantage of with changes in policies or direction. These corporate leaders don’t talk about special privileges for loyalists, but rather take the insurance loyalist for granted, assuming that no matter what they do as a company, or how they treat their customers, the loyalists will stay. Similar to some sports teams, where no matter how bad the product is, the fans stick around in faith for their team. In the meantime the executives get healthy bonus payment and the company makes healthy profits on the back of these consumers. Since my goal is to give good tips or advice on insurance shopping, it makes sense to get you to think about these things.

What I did tell my friend was he, like any insurance consumer, should shop his insurance regularly or talk to his agent about pricing other companies, to could confirm his pricing is the best. Why throw money away over a brand? I told him the primary factors in determining his best rate are: his driving record (tickets and accidents), the number of years of driving experience he has, and how far he drives each year.

There are other factors that insurance companies may use in determining rates and those are the important ones for insurance shoppers and finding the best price. Did his company offer a loyalty discount of some type? Yes. I asked him, what his 52 years of loyalty was worth to his company. We did some math and his loyalty discount was worth about 7%. Moving forward, knowing that your 52 years of brand loyalty to an was worth about 7%, would you stick around especially if there were greater discounts elsewhere?

In the category of these other factors, there are companies with discounts for college degrees or targeted professions worth 15% or more. Did his company have something like that? No, he said. From the perspective of being an insurance shopper over a company loyalist, in just this one discount he potentially was sacrificing an additional savings of 8%. This is only one example of potential savings for insurance shoppers. Companies advertise discounts for alumni associations or organizations you belong to, or extra discounts for having an ‘extra’ clean driving record. The key for insurance shoppers is to be willing to look around. It doesn’t take much to shop for comparison quotes, and the insurance shopper and the insurance loyalist both may save some money.My take on the matter, you don’t have to shop your insurance every year, but I would look for the triggers indicating you should. Did your rate change from one policy period to another but your primary rating factors did not? Is there a change that your company or agent pass off as simply ‘new rates’? Does the explanation you hear not make a lot of sense? Not every company raises their rates at the same time, or changes discounts that you qualify for, so if that happens to you, use your triggers to be a new insurance shopper.