A guide to reduce your home insurance premium and save money

To reduce your home insurance premium, you need to know about the different factors that affect insurance costs.

Before they offer you a policy, the insurance companies will evaluate your level of risk for fire, theft, vandalism or other disasters. They will then calculate your premium based on that data. Here are a few of the things they usually take into consideration.

• Location. The area where you live places you in a certain risk category. That’s because the company’s records show the history of insurance claims filed by residents of your neighbourhood.

• Proximity to emergency services. If your home is located close to a fire station or even a fire hydrant, it bodes well. This factor is particularly important if you live in a rural area, where fire stations are few and far between.

• Type of coverage. If you want a higher level of insurance protection, you’ll pay a bit more. Choosing optional extras results in costlier premiums.

• Home infrastructure. The kind of heating, plumbing and electric systems you have will determine to some extent the premium you’ll be offered.

• Home improvement projects. Major renovations or modifications, such as the construction of a commercial or residential rental unit, can affect your insurance costs.

1. Try to keep your insurance file clean by avoiding unnecessary claims.
2. Increase the amount of your deductible, which is the amount you’ll have to cover yourself in the event of a disaster. This will directly affect your premium.
3. Install safety features: alarm system, smoke and carbon monoxide detectors and fire extinguishers.
4. Bundle your home insurance with your car and recreational vehicle policies for greater savings.
5. Ask about discounts for seniors.
6. Don’t factor in the value of your land lot when you calculate the replacement value of your home. As explained by the Insurance Bureau of Canada, an insured property does not technically include the market value of your land. When assessing the replacement value of your home, calculate only what it would cost to rebuild your home in the current year.

An important memo for all tenants: home insurance isn’t just for homeowners. All your belongings of value are considered to be assets; imagine the financial burden of having to replace all of them at once. Further, when you rent a dwelling, you’re legally responsible for any damages you may cause to the building in which you live or to others who live there.

But, dear tenants, there is some good news; most of the ways you can reduce home insurance premiums apply to you as well as to homeowners.