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rob carrick

It's time to start playing some offence against the home insurance business.

The cost of home coverage is soaring and Canadians are seething. I'm still getting supportive e-mails from people who read a column a few weeks ago in which I vented my frustration over the ever-rising cost of insuring our home. Now that we've all ranted, let's look at some ways to cut premiums. Here are 10 ideas:

1. Suggest a credit check

If you've been a responsible borrower, offer permission for your insurance company to check your credit rating. Insurers believe people who manage their credit well are less likely to burn them with a big claim. One reader reported that allowing a credit check helped cut her mother's insurance bill by several hundred dollars.

2. Online quotes

I tried a couple of sites and wasn't impressed at the way they seemed to be designed to generate sales leads for insurers rather than give homeowners a broad survey of the costs and options available. Still, worth a try. Just Google "home insurance quotes."

3. Raise your deductible

David Browne, president of insurance brokers Martin Merry & Reid Ltd., said this is a very effective way to reduce premiums. People typically think of deductibles of $500 or $1,000, but Mr. Browne said there's value to be had in going as high as $2,500. Of course, higher deductibles mean you pay more out of pocket when making a claim.

4. Bring over your car insurance

Insurers are quick to suggest this because it means more business for them. In fact, you may be able to save 10 per cent on your home insurance premium if you combine car insurance with the same group covering your house. Pay close attention to the cost and terms of your car coverage if you give it to your home insurer – I looked into this recently and found the good quote I got for our cars was tied to a higher deductible than I wanted.

5. Get an alarm system

If you've been considering an alarm system on its own merits, the discount you'll get on your home insurance may help decide things. We had an alarm installed after a break-in years ago and it has generated a discount in the area of $100 per year on our coverage. Insurers are only interested in monitored alarm systems.

6. Pay annually

There may be extra administrative charges if you pay monthly. To ensure you have the money to pay your premium bill all at once, set up an online savings account and transfer in one-12th of your premium every month.

7. Do a careful check of what you own to ensure you're not over-covered

Documenting what you own by keeping receipts and noting model and serial numbers is important to make sure your insurance company replaces exactly what you owned and not a cheaper substitute. Another benefit of knowing what you own is that you may discover you have more coverage than you need for your possessions and thus can get by with a lower amount of coverage that can lower your premiums.

An example of a company that tailors coverage to your actual possessions is Square One Insurance, which does business in British Columbia, Alberta and Saskatchewan, and plans to expand into Manitoba and Ontario.

8. Think twice before making a claim

The claims-free discount on home insurance policies can be significant. Looking at a renewal form from an insurer we dumped two years ago, our claims-free discount was quoted at $252.

9. Move down from comprehensive to broad or basic coverage …

There are three levels of home insurance coverage: basic, also sometimes called a fire policy, the mid-range broad policy and the top-of-the-line comprehensive policy. Most people go with comprehensive coverage, and you'll find that online quote providers typically default to this type of policy. But Mr. Browne said fire is your main risk. "You can live through a sewer backup, you can live through a theft, you can live through a leaky roof," he said. "But it's hard to recover from a fire."

10. … But don't cancel your coverage entirely

You'll need insurance to get a mortgage, but it's optional for those who own their homes outright. Mr. Browne calls the idea of going without insurance "totally reckless," and not just because of the risk of fire or water damage. Home insurance also covers you for liability if someone is injured on your property.

One final note: If you let your coverage lapse and then try to start it up again, your premiums may soar well above your old rate.


Your Personal Home Inventory

Cataloguing what you own can help ensure you're not paying for insurance coverage you don't need, and it can also prevent you from being underinsured. A personal home inventory can also provide the verification required by your insurer before replacing high-end items lost in a fire, flood or break-in.

One way to document what you own is make a video of your possessions. Another is to use a free smartphone app called Encircle ( With Encircle, you create an image of what you own and add the model and serial number. As an added service, Encircle registers your possessions with the manufacturer and links you with manuals and recall notices. Encircle also works with a digital camera and computer.

For more personal finance coverage, follow Rob Carrick on Twitter (@rcarrick) and Facebook (robcarrickfinance).

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