Home insurance is not mandatory by law in Canada, but they are required if you have a mortgage through a lender. Whether or not you have a mortgage, it’s still wise to have home insurance in place to protect your investment from uncontrolled risks, such as theft, water damage, or fire.
Because insurance premiums increase annually and after a claim, you want to ensure you have the best cover for an affordable rate. From doing home upgrades to raising your deductible, there are multiple ways to get your insurance rates reduced.
1. Home Upgrades
You can get cheaper home insurance rates by making a few home upgrades, such as the following:
- Plumbing: Older lead, clay pipes, or galvanized steel are more prone to buildup, leaks, corrosion, and breakage than PVC, copper, or plastic pipes.
- Roof: Your premium is affected by the condition and age of your roof and should get replaced or updated at the first signs of wear and tear (usually every 10 to 15 years). This will keep your home safe from water damage.
- Alarm system: To qualify for an insurance discount, get a fire alarm and burglar alarm system installed and monitored by a third party.
Although upgrades cost money, you will save over the long run. There will be fewer damages for you to deal with, and the chances of you filing a claim are lowered.
2. Increase Your Deductible
In the event of an insurance claim, a deductible is the amount of money you agree to pay out of pocket. For example, if you have a $500 deductible and a $4,000 claim, your insurance provider will pay $3,500. You will spend less on your premium if you have a higher deductible.
4. Pay Your Insurance Premium for the Year Upfront
Paying for your home insurance premium upfront for the year is one of the easiest ways to get your insurance rates lowered. Contact your insurance company to see if paying once a year instead of monthly can save you money.
5. Don't Claim for Small Incidents
Deductibles are usually around $500 to $1,000, so if something minor occurs, refrain from submitting a claim. Claims stay on your record for six years, increasing your premium each year, and you’d forfeit whatever discounts you earned for keeping claim-free.
6. Maintain a Good Credit Score and Allow a Credit Check
Many Canadians are unaware that their credit score can affect their insurance premium. If you have a good credit score, allow your insurance provider to perform a credit check. A high credit score will make you look reliable to pay your premiums timeously, and you’ll seem less likely to file an insurance claim.
Although you may be looking for ways to get cheap home insurance rates, be mindful that cheap insurance isn’t always the best option. You may be sacrificing coverage that you feel is important for your home. Do your research and find out from your insurance provider what their claims process is and how they will help you in a situation.