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Rob Carrick

Singing the home insurance blues Add to ...

There must be 50 ways to leave your home insurance company.

Just slip out the back, Jack: Only suckers stay loyal to home insurers who ratchet up rates every year.

Make a new plan, Stan: Call a broker, get an online quote from a company that deals directly with the public or use a quote comparison website.

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Don't need to be coy, Roy: Tell your insurer you've found someone else who is cheaper, and hit the road.

Another year, another round of big premium increases from the home insurance industry. A 30-per-cent premium hike recently arrived in the mail at my house, and Pete Karageorgos of the Insurance Bureau of Canada got hit similarly. That's the second big premium increase for him in the past two years.

"It's almost doubled in the span of four years," he said of his home insurance premium. "And have I had any claims? No."

Mr. Karageorgos is philosophical about rising rates, but then he would be as manager of consumer and industry relations for the property insurance industry association. Me, I'm ticked and lots of others are, too, if a recent discussion on my Facebook page is any indication.

The standard advice if you're unhappy with how much you're paying for home insurance is to shop around, but you have to wonder whether that's just a one-year solution. What if you move to a new company that socks you with a big increase on renewal?

You just switch again. It's time consuming to find competing quotes, but there's nothing to stop you from jumping from company to company.

"You can't be penalized by your insurer saying something like, 'He's a switcher, charge him another 20 per cent,'" said Anne Marie Thomas, business development manager the insurance quote website InsuranceHotline.com.

Get Yourself Free

But Mr. Karageorgos warns that you may lose out on customer service if you switch to a company where no one knows your name. "Where you benefit in terms of the relationship you have with your insurance company - your agent or your broker - is customer service," he said. "If something happens, it's nice to know you can call up and talk to someone."

The last time I called my home insurer, the customer service rep I spoke to couldn't open my file because it had mistakenly been given a computer code saying I was an employee of the company (as if). The problem was fixed by a rep who called me back and then politely listened to my questions and complaints about the renewal I had just received. The service was fine, but stay with the company because of it? With apologies to Paul Simon, I'm getting myself free, Lee.

Insurers being insurers, they have anticipated the possibility that you will switch on them. In a few cases, they're now requiring that you pay via monthly charges to your credit card (no option to pay annually). "It makes it trickier to leave," Ms. Thomas said. "You have to transfer your insurance somewhere else, and cancel the monthly payments." Still another indignity - you have to pay a service fee of something like 3 per cent to make monthly payments.

And yet, you can still save significant money. A broker I connected with on Twitter led me to a quote from a company that would save me a few hundred dollars a year, even with the monthly payment fee built in.

Ms. Thomas said you can switch car insurance just as easily as home insurance, but watch out for the monthly payment option. The reason is that it allows an insurer to jack up your rates almost immediately after an at-fault accident, rather than waiting until your next annual renewal.

The challenge in comparison shopping for home insurance is that coverage is not standardized in a way that allows for quick and easy comparisons. Ms. Thomas suggests you pay close attention to:

Replacement costs: Be sure your policy doesn't place a limit on the cost of rebuilding your home if were to be levelled.

Sewer backup and water damage: This type of claim is a prime reason why home insurance premiums are rising; check how much you're covered for.

Coverage levels: "Platinum" policies cover you for all risks, except a few specific situations, while "gold" offers a mid-range and "silver" covers you only for risks that are specifically named.

Liability: Coverage of $2-million is common, but Ms. Thomas said $1-million should be enough.

"Having been in the insurance industry for a million years, I would say shop your insurance every year," she said. "Insurance companies are not doing much to earn your loyalty, are they?"



Make a new plan: three ways to shop for insurance



1. Use an online quote comparison website

Insurance-Canada.ca

Insurancehotline.com

InsuranceRates.ca

Kanetix.ca



2. Call a broker for some quotes

InsuranceDirectory.ca

Insurance Brokers Association of Canada (ibac.ca)



3. Use individual insurance company websites

Google search: "home/car insurance quotes canada"



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