Some factors are beyond your control
Even if you’re a model customer with no claims, other reasons beyond your control could be pushing your premium up.
- Extreme weather events and catastrophes are more frequent. As forest fires, floods, storms, and other weather events become more frequent, they cause extensive damage, resulting in more costly claims.
- Municipal infrastructure is getting older. Outdated municipal infrastructure and a higher demand for water make sewer backups more frequent, resulting in more damage-related claims.
- Neighbourhood trends might put you at greater risk. When neighborhoods grow, demographics and risks change. For example, if there is a new commercial development near your home, or a new subdivision emerges, this might alter municipal infrastructure. These are factors insurers look at when assessing risk.
- Emergency services, skilled trades, and personal belongings are more expensive. As with any goods or services, inflation means higher prices for things like emergency services and labor costs for repairs. That means paying for claims is more expensive, too.
- Some new features are eco-friendly, but not budget-friendly. Eco-friendly features like solar panels, energy efficient windows and doors, and high-efficiency appliances are a great choice for our environment. It is important to realize that if damaged, they could result in more expensive repairs.
- Modern homes cost more. Rising home prices and more homes with high-end features (like pools and hot tubs) drive up replacement costs and liability claims.
- Finished basements need more coverage. Since they’re made with higher-priced building materials, finished basements cost more to repair if there’s a sewer backup or other damage.
Ways to save
- Claims-free discount — for homeowners and renters who have been claims-free for a specific number of years set out by their insurer. Depending on the number of years you remain claims-free, this discount could even increase over time.
- Mature homeowners’ discount. Some insurance companies will offer a specific mature homeowners’ discount, while others will automatically factor your age into your premium and give you a lower rate if you are over a certain age. (Keep in mind that the age of maturity varies by insurance company; speak with your broker to learn more.)
- Multi-location discount — for homeowners who insure more than one property on one policy.
- Multi-policy discount — for homeowners and renters who carry their home and car insurance policies with the same insurance company.
- Mortgage-free discount — for homeowners who have paid off their mortgage.
- New home discount. Some insurers offer discounts on insurance for newer homes, while others automatically factor the age of a home into their calculations and offer lower rates for newer homes right off the bat. The percentage of savings may decrease as the home gets older.
- Renewal discount — for homeowners who keep their property insurance policy with the same company for a set number of years.
- Alarm discounts — for homes with centrally monitored fire or security alarm systems.
- Water damage prevention discount — for homes with leak prevention and shut off systems (a working sump pump or back-flow valve, for example).
Each insurance company has their own set of discounts, please contact your broker for more options.
Choosing to pay a higher deductible in the event of a claim is a sure-fire way to reduce the premiums you pay. It works a bit like a seesaw — the higher the deductible you choose to pay, the lower your insurance rates will be. Just be sure you choose a deductible amount you’re comfortable paying if you need to make a claim down the road.
If you’ve got the choice between an older home and a newly constructed one, keep in mind that many insurers give discounts or offer lower premiums on policies for newer homes. It stands to reason — most new builds come with some sort of warranty and repairs aren’t generally an issue for the first few years of ownership. And to an insurer, that means fewer claims.
Of course, you want your home insurance policy to have you covered when you really need it, but keep in mind that many insurers give discounts to customers who are claims-free for a set period of time. It might pay to look at a low-value claim and assess if it’s really worth filing, or if it’s better to pay for minimal losses or damage yourself and keep your hard-won claims-free standing.
Install a company-monitored or self-monitored home security system to ward off break-ins. It helps to reduce your risk of damage and theft, and most insurance companies will reward your efforts with a discount.
Some types of home improvements can help you save on insurance. Installing a sump pump or a backwater valve (or both!), for example, could reduce your chances of making a water damage claim — so it will generally reduce your home insurance premium, too.
This post is brought to you by Economical Insurance, one of our insurance partners.