Maintaining appropriate home insurance coverage is one of the many obligations of owning real estate, and costly premiums are an inevitable reality. Unfortunately, as insurance costs continue to increase the standard coverage offerings seem to be decreasing.
As a savvy property owner, you may have wondered if there are ways to reduce the costs of home & property insurance without forfeiting a comfortable degree of coverage.
Generally speaking, the cost of insurance depends on a number of factors, but they're all tied to one key element: RISK. The greater the insurer's exposure to risk, the greater the cost of insurance. Therefore, if you reduce your insurance providers exposure to risk, they should consider reducing your insurance premiums to better align with that risk.
This is no different for auto-insurance policies: if you’re a driver with a habit of breaking the laws governed by the Highway Traffic Act, then you’re a greater risk to your insurance provider and, consequently, you will pay more for auto insurance coverage.
So how can you reduce the exposure to risk of your home or investment property?
It turns out that some insurance providers are willing to reduce your insurance premiums, often by as much as 10% (or more), if you have undergone some home improvements and repairs that materially improve and protect your property, thereby reducing the exposure to risks associated with loss or damage.
If you have recently undergone any of the following upgrades, repairs or replacements, we suggest you contact your insurance provider to see if they qualify for a reduction in your annual premiums:
- Backwater Valve & Sump Pump (some municipalities offer subsidies to homeowners for this. Click here for more information on the Basement Flooding Subsidy Program
- Upgraded electrical service and distribution panel (especially if it’s the older type fuse panel)
- Upgrade services & utilities like replacing Knob-&-Tube wiring and galvanized piping
- Carbon Monoxide & Smoke detectors “hardwired” and monitored by alarm & fire services
- Alarm system, complete with cameras and monitoring by security services
- Type of fireplace: wood burning vs. gas or electric
- Do you work from home? Is someone typically home on a daily basis?
- Furnace and Air Conditioning equipment (let your insurer know if you have a maintenance contract and if your equipment is under warranty)
- Multi-residential: fire safety approvals for the appropriate separation of residential dwellings and protection from fire and smoke.