Have you recently had the “pleasure” of shopping for home insurance? As an insurance broker and founder of Assurances Multi-Risques, I recently did just that in order to better understand the reality of our customers’ situation.
Through calls and quotes, I have seen how difficult it can be to make the right decision when it comes to insuring your most valuable asset: your home. It may be tempting to simply choose the lowest premium, but is that really the best insurance product for you? Not necessarily. We understand that you like to save money, so in this article, we want to share a tip for lowering your insurance premium and explain the effects that this reduction will have.
However, before revealing our tip of the week, we would like to point out that it is perfectly normal for an insurance agent or broker to ask you several questions before telling you what coverage is right for you and how much your premium will be. In fact, the more questions the insurer asks you, the more reassured you should feel, because it means they are making sure everything is clear, thus saving you a lot of trouble in the event of a future claim. Nevertheless, these multiple questions certainly make shopping for insurance laborious, even painful. To avoid having to make multiple calls and answer the same questions over and over again, we recommend contacting an independent insurance broker who works with several insurance companies. This will save you a lot of time!
Lower your home insurance premium by increasing your deductible
A deductible is the amount you must pay out of pocket when you file a claim. So, for example, if you file a claim for damages totaling $4,000 and you have a $500 deductible, your insurer will send you a check for $3,500. And if you increase your deductible to $1,000 or even $2,500, you should see a decrease in your insurance premium.
Why ? Because your insurer will then consider that you will contribute more financially in the event of a future claim! This practice may be even more tempting with home insurance than with auto insurance, since in the event of a claim, you do not have to pay the deductible as you would with auto insurance: the insurer subtracts it from the amount of your compensation.
Is it always worth increasing your deductible?
Increasing your deductible to lower your premium isn’t always the right solution; it all depends on your financial capacity and how much you’re willing to pay out of pocket in the event of a claim. To make the right decision, we recommend discussing it with your agent or broker first. Then calculate how much you will save per year by increasing your deductible and how long it will take to recoup the increase in your deductible if you don’t make any claims.
Also, remember that filing a home insurance claim will cause you to lose a significant discount (for a clean record) and will follow you for several years. So, if you know that for losses under $X, you won’t file a claim and therefore won’t lose your discount, increasing your deductible may be a good idea.
Other tips to reduce your premium
This isn’t the first time we’ve mentioned in our articles that increasing your deductible can lower your premium. In fact, in one of our previous articles explaining how insurers price home insurance, we provided several other tips for saving money. We invite you to read it by clicking here .
In conclusion, now that we’ve shared with you the tip of increasing your deductible to lower your home insurance premium, we’d like to share another way to save money: work with an insurance broker! Not only will they shop around for insurance on your behalf, but they’ll also find you the best price based on your insurance needs. In addition, they can advise you on the amount of your deductible and be your ally in the event of a claim.