Who doesn’t want to pay less for home insurance! It is an essential when you own a home: your lender requires it, and it helps deliver peace of mind that, if you should face a fire, theft or other loss, it would be covered. But looking for “cheap” home insurance can create more headaches than it solves. Why?
You Get What You Pay For
The internet has leveled the playing field when it comes to insurers. People are able to scour comparison sites to check prices, and this allows the cheap to compete. A policy that appeals based solely on price, however, leaves you incredibly vulnerable.
What if your water heater breaks down and your basement is flooded? You find out only then that water damage is not covered by your cut-rate policy. What if someone trips on your property, and only then do you find out your insurer has a complex loophole that allows them to deny the claim? What if you simply call to ask a question about your cover, and the customer service is horrendous?
All of this can happen with “cheap home insurance policies. But that is not to say that you cannot find affordable cover – that actually covers.
Money Saving Tips
- Combine your cover. You likely want both buildings and contents cover to protect the structure and everything in it. If you use the same insurer and combine policies, it most often costs less.
- Increase your excess. Generally, the higher your excess, the lower your premium. Do not, however, raise your excess to a level which you cannot afford. You can always put the money you save on premiums into a special account to cover the excess in the event you make a claim.
- Skip the monthly payment. Saving up for a yearly payment will save you money in interest and administration fees. Again, you can put money away into a special account so the annual bill doesn’t give you sticker shock.
- Be selective about your claims. For example, if you can pay for a minor repair out of pocket, it will help you save money on insurance. Insurers offer no claim discounts; after a few years, this can save you up to 50% on your cover. It’s worth picking up a small repair on your own.
- Make smart home investments. Strategic investments can lower your insurance rates: for example, fire alarms, insulation around your water pipes, security systems and the right locks can cut your costs by quite a bit.
- Reevaluate your cover each year. Reassess your needs and make sure you still have appropriate insurance. And if you did make upgrades and changes to the house that will lower your costs, by all means, tell your insurer so they can adjust the pricing.
Instead of looking for “cheap” insurance, look for great coverage that is budget-friendly. These policies are out there; we’ll help you find them.