Factors that can lower your home insurance costs
Owning a home carries plenty of expenses. One of everyone's favourites (the sarcasm came through there, right?) is home insurance. Intangible expensives like insurance always seem like a waste - until you need to make a claim.
But whether or not you have to make a claim, you can lessen the monthly or yearly burden of home insurance by addressing a few key areas of your house that contribute to determining the cost of premiums. Here are some considerations to make
Location, location, location
So, location might not be as critical to home insurance rates as it is to the selling price of a home, but it still matters a lot. Insurance companies use data to determine the likelihood of a claim being filed from each neighbourhood, and let the risk inform the price of that neighbourhood's premiums. Living near a river that might potentially flood is one thing that could drive up premiums. Another is a high crime rate that might lead to break-ins.
The modernity of your home
The roof is one area of a home that contributes to premiums. Insurance providers won't like the looks of a 20-year-old roof that is liable to leak and lead to water damage. The same goes for pipes. Old pipes that haven't been upgraded for decades are a risk to leak, which means they could result in the homeowner making a claim. Newer pipes, on the other hand, instill confidence in insurance companies and reduce the probability of a claim. Another factor is the heating system. Wood-fire, for example, is a greater fire risk than electric, which means they tend to lead to higher premiums.
How often you pay your premiums
Paying your premiums monthly is much easier to budget, but sending in a bulk payment at the beginning of the year might net you a discount. Not all companies offer this deal, but many do. It ensures them that you won't break the contract or cease payments, so an up-front payment plan makes them amenable to lower premiums.
While not all of these variables are relevant for every homeowner - you aren't going to move if you just bought a home, and upgrades can be expensive - they each factor into the cost of premiums. We recently offered some more practical, far-reaching advice, if that suits you better. But if you currently own a house, consider whether upgrades might lead to a net gain down the line. If you're in the market to buy, ask your insurance company about the place you're considering.