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How to reduce your home insurance premium

How to reduce your home insurance premium

Home insurance is usually a must-have for homeowners as it protects against potentially huge losses from surprise accidents or events.

However, if your policy premium is on the expensive side, it can eat into the household budget. On the other hand, if you choose the cheapest home insurance policy, you may miss out on some crucial features.

So, if you’re wondering how to save on home insurance to find the perfect balance between cost and features, here are some tips and tricks.

1. Use the multi-policy discount

Australia has a competitive insurance market and many insurers try to induce new customers with a variety of benefits to get their business.

To prevent current customers from switching, insurers often provide special discounts to customers who have all their policies with the same insurer. This may include their car and house. This multi-policy discount can help to cut the price of premiums in all your policies, which could result in a considerable savings.

2. Take advantage of the loyalty discount

If you’ve been with your insurer for many years, you may be able to negotiate a discount for your loyalty. Often the insurer won’t want to lose your business and will offer a premium reduction. Even a small discount of five or 10 per cent on your premium can save you a fair amount of money.

3. Opt for a higher excess

Your premium often reduces considerably if you opt to pay a higher excess. ‘Excess’ refers to the amount that you need to pay from your own pocket when you make a claim.

It’s important to remember that while increasing your excess can help you reduce your premium, you may have to pay a lot more if and when you make a claim. Some people consider this too much of a gamble, so it comes down to personal circumstances

To find out the amount and type of excess that is applicable for your policy, you can check your Certificate of Insurance.

4. Add safety features and home security

When calculating your premium, insurers consider multiple factors, including how likely you are to make a claim. If you take proactive steps to protect your property from being broken into or vandalised, you may be able to reduce the cost of your home insurance. If you’ve installed security & smoke alarms, deadlocks, security screens on all doors and windows, home monitoring systems and other security measures, you could ask your insurer whether they can reduce your home insurance premium.

5. Consider the area you're buying into

The location of your house may play a significant role in your home insurance premium. If you choose a neighbourhood that has a high crime rate or where natural disasters are a semi-frequent occurrence, it’s possible that your insurer will charge you a higher premium.

It may pay to investigate the location of your house thoroughly before purchasing in more ways than one.

6. Maintain a good credit score

If you have a solid credit history, many insurers will offer you lower premium rates. Often people who have good credit scores pay their bills on time, don’t take on more credit than they can afford, keep their credit balances as low as possible and are always honest with lenders and insurers.

It may be worth checking your credit record regularly and correcting any errors promptly.

7. Browse through your options

There is a lot of variance in the cost of cover across the insurance market. That’s before discounts are taken into account So, it’s worth browsing your options before selecting a home insurance policy that suits your needs.

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