Rainstorms, flooding and train derailments have caused many Canadians hardship in the past year but luckily insurance coverage has eased the pain.
While those who filed claims for assistance in those trying times may expect an increase to their home insurance premiums, those who weren't impacted may also still feel the sting. Experts say home insurance rates will go up across the board.
Why should your rate increase if you didn't make a claim?
The main reason, notes insurance firm Square One, is that your local home insurance provider is part of the worldwide market, which means disasters (and claims) from across Canada and around the world affect the rates charged for your policy.
As an example, TD Insurance reports that it will pay out an estimated $125 million on claims for evacuation as well as home and automobile damage from the Alberta and Toronto floods of 2013.
Homeowners need not despair, there are several simple cost-savings tips to help reduce home insurance costs.
Here are 10 ways to save money on your home insurance, courtesy of Square One (www.squareoneinsurance.ca):
- Only insure belongings you own. Most home insurance policies include $6,000 of coverage for fur coats and $5,000 for gold bullion. If you don't own either, why pay to insure them? Find a provider that lets you personalize your policy to your needs and pocket the savings.
- Don't over-insure your house. If you own a house, you should only insure it for the amount it would cost to rebuild, not what you paid for it. When you bought your house, you paid the market price for the house and the land. Home insurance only covers the house.
- Increase your policy deductible. The standard policy deductible on most home insurance policies is $500. This amount made sense 20 years ago, but it is quite low by today's standards. Increasing your deductible to $1,000 or $2,500 is one of the easiest ways to save money.
- Don't file claims for small losses. You have the right to file a claim no matter its size, but keep in mind your policy includes a claims-free discount that can total 20% or more. So, do the math before submitting your claim. You might be better paying a small loss out of your own pocket.
- Find an interest-free monthly payment plan. Most providers offer monthly payment plans but beware because not all plans are created equal. Many plans charge interest rates that are higher than what you would pay on your credit card. So, look for plans that are interest-free.
- Shop around for the best coverage and rate. Just because you've been with your current provider for many years, or you buy both your home and auto insurance from them, doesn't mean you're getting the best coverage or rate. Get comparison quotes online and you'll likely find a better deal.
- Recommend your friends. If you're happy with your provider, ask if they have a referral program. Some companies offer account credits for each person you refer who buys a policy. Not only will you save money, but you're helping your friends save money, too.
- Install a backwater valve. These devices prevent water from backing up into your home from the city sewer system. The device costs about $100 and installation costs about $1,000. Many cities offer rebates, and some insurance providers offer discounts, for installing these devices.
- Replace plastic plumbing hoses with braided steel ones. The plastic hoses connected to fridges, dishwashers, washing machines and toilets can leak quite easily. Replacing these hoses with braided steel ones to reduce the chance of a loss, which helps keep your premiums low.
- Install a monitored burglar alarm. All insurance providers offer discounts if you have a burglar alarm installed, activated and monitored. So, consider installing one. Not only will you save money on your home insurance, but you'll also have some extra peace of mind.
