Homeowners insurance comes with options, and the best way to navigate those options is to know what they are.
Shop around, then enlist help
- Finding the biggest discount isn’t just for cars and airline tickets. “Start by looking to see if there are any companies that offer discounts,” says Cory Gagnon, associate financial adviser, The Beacon Group at Assante Wealth Management Ltd. in Calgary, Canada. “An insurance broker or financial planner can be very helpful in these situations as they have access to databases that allow them to source a wide variety of companies.
- This is where the Eyton-Jones team really shines. Our brokers are pros at saving people money on their rates with many of the top insurance carriers in the country. We’ve been in business for over 60 years and we’re happy to help you benefit from all those years of experience.
Raise your deductible
- As with other forms of insurance, you can save big on your policy if you simply increase your deductible. This can shave a significant amount off of your annual premium, however, if you have a casualty you will be responsible for it until it reaches the higher deductible limit. Thus, you should be able to handle that additional amount before agreeing to the higher deductible. Given that an insurance company may severely penalize customers who file typically goes up when you make a numerous claims, a silver lining of the higher deductible is that you will file fewer claims.
Don’t confuse what you paid for your house with rebuilding costs
- One of the most important things that a homeowner should know is the difference between replacement cost versus actual cash value.
- Replacement Cost will insure you for the cost that it would take to replace your home and all of the other personal property in it.
- Cash Value (ACV) is the actual value of your home and does not take into consideration zoning permits or removal of damaged property and is more often used by investors and not homeowners.
- If, for instance, a laptop you bought for $1,000 is stolen, with replacement cost insurance, you will get $1,000 for a new laptop. With ACV, you’ll get the current market value for the laptop — which will most likely be far less, since it has probably depreciated over time. ACV premiums generally cost less, but you’ll likely pay more out of pocket after a loss.
- The land under your house isn’t at risk from theft, windstorm, fire and the other perils covered in your homeowners policy. So don’t include its value in deciding how much homeowners insurance to buy. If you do, you will pay a higher premium than you should.
Improve your home
- Sometimes little changes and improvements to your home can lead to lower premiums. Some insurance companies offer lower rates for a variety of factors having to do with the structure and build of your home, including the type of wiring, plumbing, and structure material. If you are in an older home, making an investment in upgrades to some of these core elements will make your home safer — for example, less threat of pipe bursts, electrical fires — and thus lower your insurance premiums and saving you money in the long run.
Stay with the same insurer
- Consider buying your homeowners and auto insurance policies from a company that offers both and bundling them together. Some companies offer discounts ranging from 5% to 15% if you buy both types of coverage from them.
- Some companies offer longevity discounts if you’ve been with them for several years. Typical discounts are 5% if you’ve been with the company for three to five years, and 10% for six years or more. If you’re over 55 and retired or disabled, you may qualify for additional discounts.
Improve your home security
- Most providers offer discounts for centrally monitored smoke and fire detectors (those monitoring systems that notify emergency services outside of the home). Companies will vary on the items and the amount of discount they will give for other items like deadbolt locks and security camera systems – we can help you get the most from these discounts.
Understand your policy and it’s limits
- Your home is your biggest investment. Make sure it’s adequately protected from risks you cannot afford to cover yourself. Providers will send several explanatory pages with your policy. Take the time to review these pages and call us if you have any questions or are unclear..
- Check to see what supplemental coverage you may need. This is especially important if you live in an area that experiences severe weather situations, such as tornadoes, hurricanes, earthquakes, sinkholes, wildfires, or floods. Some items like wood privacy fences, pool or patio screen enclosures, and freestanding sheds may not be covered in the event of a loss. If you made substantial improvements or major purchases make sure you have enough coverage to offset replacing those items.
- It makes no sense to buy insurance to protect yourself against risks you are unlikely to encounter. For example, earthquake coverage in a non-earthquake zone, or a jewelry floater to your policy if you don’t own expensive jewelry. However, don’t skimp on coverage that’s essential, such as wind, fire or flood insurance.
Keep Your Information Up-to-Date
- Review your policy and the value of your possessions at least once a year – you want your policy to cover any major purchases or additions to your home. But you don’t want to spend money for coverage you don’t need.
- Life events are another easy way to snag a few additional home insurance discounts. For example, if you’re single and getting married, you could be eligible for a married discount. And, in the unfortunate event of the death of a spouse, a widow/widower is eligible for a discount as well.
- Contact us to discuss any changes in your situation that occurred during the year. Make sure you’re addressing any new insurance needs and removing any coverage that’s no longer necessary.