Advisor magazine, a magazine for finance professionals, recently posted an article offering no-nonsense home insurance tips. While the author didn’t say why, they theorized that home insurance in Canada will be going up for nearly all policyholders in the coming year, and these tips were meant to minimize the premiums their clients would pay.
Here’s our own spin on simple home insurance tips.
Tip#1: A Bargain Policy is Not the Best Policy
It’s always smart to minimize recurring costs like insurance, if it makes sense to do so. But don’t go for a bargain basement policy that cuts out insurance against some risks and doesn’t properly cover your home and contents. Your broker is the best person to talk to about getting the most bang for your buck, especially since they can shop policies from different insurers for you. For example, you may be able to find a policy that offers more coverage for the same amount of money you’re paying now. Insurance is about helping you out of a bad situation if you need it, not a zero sum game of dollars and cents.
Tip#2: Increase Deductibles
This is usually the first port of call for people who want to save money on their insurance. The best way to determine what your deductible should be is to ask your broker what amount of money is worth putting an insurance claim in for – then raise it to that amount. If you’re not going to put in a claim for a $750 repair bill, your deductible may as well be $1000 or higher.
Tip#3: Always Be Shopping
Those of you familiar with the film Glengarry Glen Ross will know this iconic line: “Always Be Closing.” It’s the same with insurance; don’t get comfortable with one insurer. Some may give you a loyalty discount after a certain number of years, but it’s not usually worth sticking around for a 10% discount.
The main advantage of being with a broker is that they can shop policies for you at renewal time to make sure you’re in the best one for your situation.
Tip#4: Check the Interest Rate
Some insurers offer plans with a lower interest rate or no interest at all if you pay the premium up front. Some offer better interest than others with monthly plans, but you’ll almost always get a better deal if you pay up front. Depending on the policy, this could net you a decent savings.
Tip#5: Make Sure Your Belongings are Insured
There is one small problem with this article – they state that if you don’t need a plan that covers so much for fur coats and so much for gold coins, shop around for a plan that lets you personalize your policy. The catch is that there aren’t a lot of plans on the market that let you do this, and the ones that do may not actually save you money.
Most policies have a set amount of insurance for various categories, so the key here is not to find a personalized plan, but to make sure your actual belongings are covered. If your family is composed of Mac lovers, and you have a bunch of iPads and pricier computers, add the cost of all that tech together and make sure it’s all covered in the event of a loss. Find a policy with a decent rate and add riders to it to make sure those possessions are all covered. That may end up costing you just as much as a personalized plan, and it will get you much further ahead.
If you want more tips on how you can get a better policy to cover your home and stuff, give us a call today to find out what kind of personalized tips we can offer for your particular situation.