Lowering Your Auto and Home Insurance Premium

by admin on December 16, 2011

Most people will agree that insurance is important and yet it is expensive to have. How to lower your home and auto insurance premiums?

You may be surprised to find out, but the best thing to do is talk to an insurance agent before you buy a house. Chief underwriter and vice president of TD Insurance Henry Blumenthal explains that there are houses with problems so serious that they invalidate the home insurance or increase insurance premiums to a level that makes them unaffordable.  For example, a routine home inspection may reveal that the house had experienced serious water damage that will cost thousands to fix. Or the house may be built in an area where the insurance company often receives water damage claims. Even after repair works, the home will be susceptible to damage. This is one example how an insurer’s experience and insight can help home buyers make the right decision, which is particularly important when it comes to insurance premiums. To this, insurers are mainly concerned with 2 factors when they assess risk. One is the potential loss that may result from a particular problem and the other is the frequency of occurrence (The Globe and Mail).

There are other reasons to get a quote before buying. Seemingly identical houses may carry different premiums because of the many factors that determine the cost of insurance. These include proximity to emergency services such as hydrants, police station, fire department, and others. Once you buy a house, there are other ways to lower your home insurance premium. You can install an alarm system and protect your house against hurricanes, earthquakes, and other natural disasters. This is particularly important if the area where you live is prone to such. You will lower your premium if you add features such as storm shutters or a reinforced roof. Improving your credit score will also help as insurance providers often run a credit check before giving quotes. Finally, it is a good idea to buy all insurance policies, be it homeowner’s, auto, and so on from one insurance provider to get a discount (About.com).

Buying your auto insurance from the same company you bought your home insurance is one way to lower the premium. You can also consider forgoing coverage you do not need. For example, you may drop comprehensive or collision coverage if you have an old vehicle with a low market value. Having such coverage is often useless because the cost of the insurance may be as high as the amount on any claims made. In addition, it is a good idea to buy a low-profile vehicle. Buying a car that is expensive to repair increases the premium. Opting for safety gear is another way to qualify for a discount. If you have daytime running lights, anti-lock brakes, automatic seat belts, and air bags, you are likely to qualify for a discount. Anti-theft devices (e.g. an alarm system) will get you additional savings. Finally, you may want to look for insurer providers that feature low-mileage discounts to further lower your auto insurance premium (MSN).

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