As a broker we are often asked how to save money on insurance. With any question, it seems very simple on the surface but there are many pieces to the puzzle to consider. The easiest way for us to help you is to look at a policy to see what discounts a client may be missing out on. How the companies determine the cost of policies has become much more complex, with factors that surprise even us at at times. Having said that, lets take a look at some tips to help you save on insurance.
Home Insurance Discounts:
Multi-policy Discount –The easiest discount to have is to combine your home and auto policies with one company. The discounts for this differ for every company but usually range from 5%-17%. Clients have been catching on to this discount, which is great to see! The reason why companies offer discounts for having both policies together is statistically when someone has more than one policy with a company they are more loyal, have less claims, and are more profitable.
Non-smoker Discount –Another easy discount is the Non-Smoker discount. This one is self explanatory – if you smoke there is a larger risk of a fire.
Mortgage Free Discount – We are often asked about this discount as from the outside it may seem confusing why a company would offer you a discount for not having a mortgage. What is the reasoning behind this? Companies offer this discount for two main reasons: 1) Typically people who have paid off their mortgage have more money and tend to be better off financially. If something needs to be fixed or a minor claim occurs they often pay for it without question. When money is a little tighter we tend to try and make things last, meaning we may put off replacing the roof even though the shingles are showing their age. These shingles are more likely to leak, which increases the likelihood of you having a claim. 2) A relatively unknown part of your policy is called the Mortgage Clause, which states that the insurance company will pay out the mortgage in the event of a loss, even if you have violated the policy. This means the insurance company would be paying whatever you owe the mortgage company even though there is no coverage because of your actions. Of course it doesn’t mean you can celebrate – the insurance company can sue you for the amount you owe.
Alarms – If you have an alarm monitored by a company such as ADT, there is almost always a discount for it. The amount of the discount depends on the company and which alarms you have signed up for.
Age – Ah yes, the seniors discount. If you are over 50 chances are you qualify for a mature or seniors discount with most companies.
Sump Pumps/Back-flow Valves and/or Septic Tanks – Water damage has become a huge expense for the industry, which is why they are now offering discounts if you have a Sump Pump, Back-flow valve or Septic Tank. These preventative measures help stop losses from happening.
Paying Annually – All insurance companies charge a fee for offering monthly payments. A few companies have started offering a discount if you pay for your insurance in one payment.
Where you live – Although this would seem odd to place under discounts, there are often discounts generated by your postal code. This typically involve how close you are to fire halls, the size of the fire hall, and the amount of losses the company has in that area.
Next we will look at a few things that will raise the cost:
Wood stoves/Fireplaces – Most companies charge a flat fee for having a wood stove or fireplace in the house. This is on top of the required inspections to ensure it is within today’s standards. However most companies do not charge for natural gas or propane fireplaces.
Oil Heat – With the risk of pollution, many companies now are very strict with oil tanks and add a surcharge onto your policy. Many tanks are only good for 15 years, which makes the additional cost of oil add up in a hurry. You should also be careful what type of oil tank you install, as there are varying qualities of tanks.
Pools/Hot Tubs/Ponds – Every kid wants to spend their entire summer in the pool right? Pools can be dangerous on the best of days, when parents are carefully watching kids like a hawk – but what happens when mom and dad aren’t home? Pools, Hot Tubs and Ponds increase the risk of someone getting hurt on the premise, meaning insurance companies will charge you more if you have one. This is not a comprehensive list, just a few items for you to potentially save money with. Ask our experienced brokers if you qualify for any savings today.