House insurance is necessary for closing on the sale of a property. But how do you know what insurance agency will give you the best rate? And, when you're working with a broker, how do you get as low a rate as possible?
The following are tips from the Insurance Bureau of Canada:
1. Shop around: If you have been with an insurance company for a number of years, or even on your previous home, it doesn't hurt, and may even beneficial, to shop around for a company that will give you a better rate. There's always the trade-off of more time and effort, but the result may be an extra $20-30 of cash in your pocket per month. As well, while you're talking to a broker, ask about any promotions or discounts.
2. Get a home insurance quote: If you have car insurance, consider taking out your home insurance with that same company. Often insurance companies will bundle home and car insurance to give you a lower rate.
3. Increase your deductible: You can increase the amount you need to pay in the event of an accident which will in turn lower your monthly payment. Make sure, however, that the deductible is an amount that you can actually afford to pay should there be a claim.
4. Take preventative action: You can do things to reduce the risk of accidents and damage to your home that will lower the chance of having to make an insurance claim: installing home security equipment, upgrading plumbing, reinforcing roofing, installing a backwater valve, storm shutters, sump pumps, and a fire sprinkler system.
5. Ask about further discounts: Talk to your insurance companies about any discounts, for instance if you're over the age of 55, or are mortgage or claims-free.
6. Pay premium annually: You can avoid possible interest or service charges by making your payment annually rather than monthly.
7. Evaluate your coverage every year: An evaluation of your insurance annually will ensure that your coverage reflects the value of your home, including any renovations, upgrades, or major purchases.
8. Quit Smoking: Many home fires are caused by careless smoking. Insurance companies will acknowledge that non-smokers have a lower risk of house fire than smokers. This simple--but not easy--act will also lower your life insurance premiums, and add years to your life.
9. Don't over-insure your home: You will pay more if you include the value of the land surrounding the home, rather than just the house itself. Insure for what the house would cost to rebuild in the event of a loss, and not the market value of the surrounding land.
10. Keep your policy until end of term: Terminating your insurance policy before its term is over will result in a cancellation fee. If you choose to be insured with a different company, then wait until your current policy is up for renewal before doing so.
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