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HOME : Just the FAQs Ma'am

Cutting Insurance Costs

I know I need to have insurance for my home and car, but it's costing me a bundle! How can I save money on my insurance without skimping on the coverage?

Here are a few suggestions to make sure your insurance coverage is right on the money.

• Choose a high deductible. The deductible is the portion of the claim that you agree to pay, or have "deducted," from what the insurer pays when you have a claim. Generally speaking, the higher the deductible, the lower the premium - sometimes as much as 20 to 30 per cent a year. But don't choose such a high amount that you wouldn't be able to pay it out of pocket if you had a claim tomorrow. Before you opt for that $1,000 deductible, ask yourself: would I be comfortable paying that much of a claim?

• Consider placing both your home and auto insurance with the same insurance company. Many companies will offer a discount on your home insurance if they are already supplying your auto insurance (in some provinces, government regulations may prohibit insurers from offering discounts on auto insurance). On the other hand, should you have a problem with your insurer and decide to change companies, you will have to replace both your homeowners and automobile policies.

If you do plan to use the same insurer for both policies, make sure you aren't confusing the company with the insurance broker. In other words, while you may be buying both policies from the same broker, the broker might place your coverage with two different companies that he or she represents (which could be the best solution for you).

(Note: Some insurance companies are direct writers, meaning they do not sell their insurance products through a broker. They sell their products through agents, who are employees of the insurance company.)

• Install safety devices, like burglar alarms, deadbolt locks, and smoke detectors. Most insurers offer a discount on homes that have some or all of these protective devices. While some losses are unavoidable, many can be prevented. Practice good risk management - maintain your home and car properly, don’t take unnecessary chances - in short, play it safe.

• Don't make a lot of small claims. Use your insurance wisely - don't use it to make small claims that you could afford to pay for yourself. Too many claims create an impression of carelessness. It will likely result in higher premiums, or even a refusal to renew your policy. Save your insurance for serious losses, and swallow that $200 loss yourself.

Although we all want to cut costs, don't make price your only consideration in buying insurance. Understand what your policy does - and doesn't - cover, and make sure it meets your needs. After all, you can buy a cheap car too, but it may not be what you want. Lada, anyone?

Note: Remember, policies vary, so when in doubt, Contact Us.