How to Get a Lower Rate When You Renew a Home Insurance Policy
We all want to pay as little as we can for a home insurance policy. We want the exact amount of coverage we need at the lowest rate. However, not many people know how to negotiate lower insurance premiums. If you want to save money, use the following tips when you renew a home insurance policy:
Lower your coverage
One of the biggest ways people get ripped off when it comes to home insurance - or any type of insurance - is by paying high premiums for more coverage than they need. Before you renew a home insurance policy take an inventory of your personal space and belongings to see if you still need the same amount of coverage. If not, lower the amount of coverage for a lower rate.
Raise your deductable
The less money the insurance company needs to pay out with a claim, the lower your rates will be. If you raise your deductable, the insurance company has to pay out a lower amount for the claim and your premium rates will also get lower.
A deductable is the out-of-pocket amount of money you as the homeowner have to pay before the insurance company starts to cover the costs of damage, loss or theft with your claim. Insurance rates are calculated on risk to the insurance company. The lower risk of them having to shell out money the lower your rates will be.
Check your credit report
When it comes to your home insurance policy your credit report counts, says popular personal finance website Get Rich Slowly.
"Insurers have found that credit history is a reliable predictor of how risky someone is to insure, they use that information to determine whether or not to offer you a policy, as well as how much to charge for your premium. So besides all the other important reasons to monitor your credit report, doing so can also yield you a lower premium on your home insurance." You can get a copy of your credit report with one of Canada's two major credit bureaus: Equifax or TransUnion.
Shop around for lower prices
Just because your home insurance policy is up for renewal with one provider, it doesn't mean you need to stay with them. In fact, when you go to renew a home insurance policy, it just means you won't have any penalties if you want to change providers. Shop around with several different providers to see who offers the lowest rates.
You can also ask each provider if they offer group discounts for certain clubs and associations. If you belong to a certain association, such as CAA, mention it when shopping around and you may just find yourself with a lower rate.
Carefully review your situation the next time you need to renew a home insurance policy, and decide how to make it work for you.