Your home is likely one of your most valuable assets. Protecting it is vital, so it’s important not to skimp on your insurance coverage. But that doesn’t mean you want to pay more than you need to either. With lots of overlooked savings strategies out there, let’s make sure you’re getting all the discounts you deserve on your home insurance.

How are home insurance premiums calculated?

It can be helpful first to understand how insurers determine the cost of your coverage. There are a lot of different factors they take into account. It begins with estimating your home’s value. Then, they look at how much it would cost to repair or replace the structure and its contents, as well as the claims risk the property poses. Each insurer will have slightly different risk criteria, but they often include:

• Where you live – Some neighbourhoods have a higher crime rate, history of sewer backup or likelihood of weather-related events.
• How old your home is – Newer buildings will typically have less wear and tear that can cause issues.
• What pipework your home has – Galvanized or lead piping can pose more risk of leaks. Insurers typically prefer upgraded copper or plastic plumbing.
• How your home is heated – Certain types of heating system, like oil or wood stove, tend to have more fire claims.
• What the contents are – Expensive home furnishings and possessions will require greater coverage to replace.

Looking at these factors, you can see a clear pattern in the risks insurers care about (fire, flooding, security) and this gives you power. By making key improvements or installing certain features, you have the ability to reduce your risk in the eyes of your insurer and therefore lower your insurance costs. Combine this with some savvy insurance strategies and you can save a lot on your home premium.

6 ways to reduce your home insurance premium

1. Strengthen your home security
   
   Theft is one of the main things your home insurance protects you against. Your insurer will appreciate any precautions you take to limit the chances of a break-in. The number one defense you can put in place is an alarm system. Just remember that smart home security often doesn’t qualify. Your system typically needs to be centrally monitored by an approved company to earn you a discount.
   
   Savings potential: A home security discount can save you up to 10%
2. Bundle your insurance policiesbr />
   If you don’t already insure your home and car with the same provider, it may be worth looking into. Insurers want to be your primary partner and will often provide significant discounts off both your home and auto policies when you bundle them together.
   
   Savings potential: A multiple-policy discount can save you up to 10%
3. Save claims for larger losses
   
   Home insurance is designed to help cover major costs that would seriously impact your finances. As a result, it’s important to be strategic about when you leverage it. Making lots of smaller claims often isn’t worth it, especially if you have a deductible to pay. It may raise your premiums and prevent you from accessing a powerful claims-free discount – the value of which can far exceed the amount you get back from small claims.
   
   Savings potential: A claims-free discount can save you up to 20% or more
4. Install water damage prevention
   
   Insurers love cautious homeowners. Taking proactive steps to protect your home from damage will often net you valuable discounts on your insurance. One way to do this is by installing a sump pump, backflow valve, leak detection or automatic water shut-off system – all excellent features that help prevent future flooding issues.
   
   Savings potential: Water damage detection sensors/alarms can help you save up to 5% more
5. Notify your insurer about upgrades
   
   Actively maintaining your home is a great way to avoid any surcharges. If you’ve made upgrades to important areas such as your roof, furnace, water tank, plumbing or wiring, don’t forget to let your insurer know. These updates all make your home less susceptible to damage and therefore reduce the chance you’ll need to make a claim. Review your home upgrades to ensure that you are insured adequately. For example, have you replaced an asphalt shingle roof with a metal or clay roof, or replaced a hot water tank with a tankless on demand system?
   
   Savings potential: Actively maintaining your home may help you avoid surcharges of 15% or more
6. Take advantage of mortgage-free discounts
   
   Have you paid off your home? Being mortgage free isn’t the only perk you’ll enjoy with this achievement. It can also help reduce your home insurance premiums. But it’s important to note that you only qualify for this discount if you don’t have a home equity line of credit.
   
   Savings potential: A mortgage-free discount can save you up to 10% or more

At the end of the day, the best way to ensure you’re getting all the discounts you deserve is simply to ask. Our insurance experts will happily help review your situation to find any savings opportunities you might have missed.