Insurance companies base your premium on the likelihood that you will submit a claim and how much it might cost them if you do. Expect insurers to ask about the following factors when calculating a price quote for your homeowners insurance policy.
Replacement cost: The price is based primarily on the size and construction quality of your home, along with the value of its contents.
Where you live: Insurers will also consider the statistical risks associated with your neighbourhood, such as exposure to crime or natural disasters.
Age and condition: An aging roof, older pipes and outdated electrical wiring are considered potential hazards.
Availability of water: Significant damage is less likely if fire stations or hydrants are located nearby.
Heat sources: A home with electric heat or a forced-air gas furnace will cost less to insure than one that is heated with oil, especially if the tank is old. Poorly maintained or installed wood stoves have been known to cause house fires and carbon monoxide poisoning.
Other uses: Insurers will want to know if you operate a home business or rent out a room or guest suite.
Additional structures: They will also ask about the presence of any outbuildings, storage shed or pool on the property.
Safety features: A monitored security or fire alarm, or a fire sprinkler system could earn you a significant premium discount.
Scope of coverage: You can choose whether to purchase a basic policy or if more comprehensive coverage is worth the extra cost.
Get quotes from several companies, but do not base your decision of price alone. You need a company that answers your questions and handles claims fairly and promptly. Ask friends, relatives or your trusted real estate professional for a referral.
HOW TO SHOP & SAVE:
- In most cases, increasing your deductible from $500 to $1000 will significantly reduce your premium.
- Look into whether your membership with certain groups including unions, non profits, alumni or professional associations could get you an “affinity” discount.
- Ask about other special discounts that may be available for seniors, loyal customers, non-smokers, or for purchasing more than one policy.
Take an Inventory - To simplify the claims process and ensure you are fully reimbursed in the event of a loss, it’s well worth the time to create a home inventory. Homeowners and tenants should always have a current record of their possessions, any identifying markings (model or serial numbers) and the estimated values. Use written descriptions, photos, audio or video recordings, or any combination that you prefer. Keep inventory records, including receipts for major purchases, in a safe deposit box or another secure location outside of your home.
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