There are a number of simple tips that you can apply to save money on your home insurance costs, regardless of whether you currently have a home insurance policy or are shopping around for a new one. Home insurance, also known as “household insurance, "house insurance", or "content insurance" (but not “building insurance”) is insurance for the contents of your house in case of theft, fire or other form of loss or damage. It does not refer to coverage in case someone is injured within your house. Read more about this in our “What is household insurance? ” article.
Anyway, let’s get started on what you can do to save!
So, what are the 9 ways to reduce your home insurance costs
1) Check what you really want to insure. The best way to do this, is to make a list of all the valuables you want to insure and the estimated cost to replace them. Or, you can use the existing inventory list from your current insurance policy and just check that it is update. It is important to do this, because you may be paying for items that you no longer own, or for items which have significantly depreciated in value since your last did the list or for items that you don’t even want to insure anymore. This is especially true for electronics (computers, tablets, large screen televisions) all of which rapidly lose value as newer models are introduced. The less items you insure, the cheaper the policy. It also helps to make sure your policy includes reimbursement for the actual value of the item and not the replacement value.
Of course, you may discover that you’ve acquired new items to add to your inventory, which might raise premiums, but if you don’t keep your policy accurate and up to date, you might have difficulties receiving reimbursement in case of loss.
2) Add an alarm or other security measures. Premiums might be reduced for installing an alarm, window bars and other accepted security measures. Which type of alarm you pick may also be a factor, as some alarms notify a central office or the police, others just sound the alarm. Upgraded locks may also qualify for a discount. Of course, check with your insurer before making an investment in upgraded security to confirm whether they offer any specific discount, and if so, by how much it will reduce your home insurance costs. The discount might not be as large as the investment, but don’t forget that the discount will be received each year for years to come and the fact that you are now safer!
3) Raise the excess. The “excess” (also known sometimes as the “deductible”) is the “fee” that you pay when you make an insurance claim. Each time you make a claim, you have to pay this fee, regardless of the amount you are claiming for. A higher excess, usually means lower monthly premiums because the insurer is assuming less risk. Don’t forget though, that if you do eventually need to claim, you will have to pay this excess. So if the monthly fee isn’t much higher, it is always preferred to have a lower excess amount.
4) Ask your agent if you qualify for any discounts. There are many factors that entitle you to receive a discount. For example, living in a neighborhood which is considered safe or living in an area that has private security or having security measures in your house. Whilst these discounts might be available if you ask about them, don’t expect anyone to let you know voluntarily – well, besides us, but we like you.
5) Don’t “over-claim”. This tip might sound a bit strange. Why have insurance and not make a claim in case of a loss or damage? Well, the answer is that every time you make a claim, even a minor one, two things happen: first, you have to pay the excess fee, and second, it increases your “risk profile” – this means that if you claim to much, the company “marks” you as a “high risk” customer and will therefore raise your monthly premium so that they don’t assume all the risk. Surprisingly, the longer you go between claims, the lower your “risk profile” drops. So, keeping a claims free record can reduce your house insurance costs by as much as 20%. This doesn’t mean you shouldn’t make claims, but just make them when necessary. And for all of you who might be asking yourselves, the answer is “yes” – when you change insurance companies, you will usually need to declare whether you previously made insurance claims or not.
6) Read the terms of your policy. Yes, we know, this is as boring as can be, but if we told you that it could save you thousands of Rands a year, doesn’t that make it a bit less boring? What you need to look for is are you paying for coverage for things that you don’t need? For example, you might not really need flood insurance if you now live on the 10th floor of an apartment building.
7) Consolidate policies with one insurer. Incentives are frequently offered by brokers to clients who move house insurance to the same company they use for their other insurance needs (car and life, for example). It’s kind a like getting a wholesale discount on your insurance! So if you have a car, it is always wise getting insurance for both at the same place. Click here to get a free Car and Home Insurance Quote.
8) Preventive maintenance. Well maintained water pipes and boilers are less likely to burst and pose a reduced risk for water damage. Check if a regular visit by the plumber will reduce your premium. This applies for anything else fundamental in your home.
9) Compare! Compare! This perhaps is the most important tip of all – don’t take the first offer you get (unless you are sure it is good), but rather compare between companies – you will be surprised how the prices may differ. Also, what does it matter how much you are paying if your insurance company won’t pay you when the time comes? So make sure you are using a company with a good reputation and good customer reviews.
So, what’s the bottom line?
By utilizing even some of these simple tips, you may be able to lower the premium for your house insurance policy and save hundreds, and even thousands, of Rands over time. Additionally, you will also be improving your home security and maintaining your property. Don’t assume there is little you can do to obtain a better price quote. Just follow these 9 ways to reduce your home insurance costs and periodically review the list to see if you now qualify for a discount that wasn’t applicable in the past