Ok, I admit it; I haven’t been keeping on top of some of our “fixed costs” of living. This year, I decided to actually look at the details of our home insurance policy and I’m glad I did: calling in ended up with me saving over 25% a year!
Everyone Should Have Home Insurance Even Those Living in an Apartment
My parents taught me the value of home insurance. When I moved into my first apartment to attend university, I signed up for a tenant’s insurance policy and I’ve stayed insured ever since.
Tenants often think they are covered by the landlord’s insurance policy and to a certain extent they are. If the building is destroyed by a fire, for example, they don’t owe anyone anything. However, if their apartments’ contents go up in smoke, no one is going to pay them back for their loss. They need their own personal tenant insurance if they want to get money to replace their clothes and furnishings.
In some jurisdictions, tenants also need home insurance to cover themselves against being sued for personal liability. I’m not a lawyer and I’m fuzzy on the details, but I believe in some places if a person is calling at a tenant’s apartment, for instance to maintain their salt water aquarium, and that service person gets hurt and sues the tenant for their injury, the tenant would need liability insurance to protect themselves from personally owing money to the tradesperson. Some home insurance policies include this type of liability insurance. Check the details of what coverage you might need to protect yourself with your insurance broker.
There’s an often over-looked advantage to starting insurance as a tenant and student: you can build up a history of claims-free years with your insurance company that can help down the road.
People Running a Home Based Business Need Insurance Too
It’s especially important for people who run a small business from their home to ensure they are adequately insured. You usually need more than a regular tenant or home owner’s policy to be properly protected. Again, speak to your broker. Don’t wait till someone sues you successfully for $500 000 to find out you have no coverage and will be personally responsible for paying that money out of your life savings and future earnings!
How Did I Get a Big Discount and Savings on Our Home Insurance Policy with TD Insurance Meloche Monnex?
Anyway, this January our policy was set to renew. It had gone up again which made me sigh. I’m trying to budget for our future retirement and the steady creep upwards of many of our “fixed costs” of home ownership was worrying me.
The cover letter from TD Insurance Meloche Monnex said our sewer backup coverage has increased significantly. I guess that’s because they realized our part of town is not prone to backups. In fact, our area is quite unlikely to get that kind of flooding due to some natural features of the landscape. Anyway, increased coverage was good especially without an increase in premiums.
The cover letter also said that if we wanted to cut costs we should consider changing our deductible.
I haven’t looked at our home insurance deductible in years. I checked the value of dropping our car insurance deductible a few years ago (which was negligible: they are only worried about what other people might claim from us in an accident not vice versa) but I had never checked on the house.
Whoa. $200! There’s no way I’d put in a claim for $200 against our home insurance.
(And with good reason. If I understood correctly when I phoned in, a claim for any amount against our home insurance could increase our next annual rate at renewal by as much as 25 %!)
So I phoned in to ask what increasing the deductible would do to change our premium, if anything.
How Much Deductible Should I Choose for My Home Insurance?
We’ve paid off our mortgage so the bank has no say in the matter.
We aren’t great believers in “stuff.” Our TV is only a 40 if you measure the screen in cm not inches. And yes, I did say our TV. There’s only one.
We don’t have stereos. We don’t collect precious art. The labels in our clothes mostly say “Marks” or “Northern Reflections.” Our furniture is solid wood mostly made by a fine woodworker who is closely related to us.
Our bikes are Canadian Tire specials. Our cross country skis are over 30 years old and still work just fine. Our skates are well made but have also seen years of hard service.
Our laptop, which is still working very well and travels with us each year, is from 2008.
We’re still working right now so if any of these things needed replacing, we could afford to just buy a replacement.
If a tree fell on the house or car and took out some windows or part of the roof, we could afford to pay for that too.
You can see where this is going. A $200 deductible is ridiculous for us.
We thought a bit about it, and picked a number out of the air. We decided we wouldn’t make a claim for less than $1500 in damage.
Why Did I Get Such a Big Drop in Our Home Insurance Bill?
I wasn’t sure what impact, if any, increasing our home insurance deductible would have on our annual rate. So I phoned in and asked.
To my surprise, the front line agent couldn’t answer the question. Instead, he politely transferred me to the Member Loyalty Department.
That’s where having tenant apartment insurance also played a role. We’ve been with the some insurance, Meloche Monnex, for a zillion years. We haven’t made in claim in over 16 either.
Anyway, when I asked about increasing the deductible from $200 to $1500, our home insurance premium dropped over 25%. That includes a small additional discount for so many years without a claim.
So if your policy is up for renewal, take a look at your deductible. If you wouldn’t make a claim for an amount that low, it may be worth phoning in to ask about raising it!
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Do you remember to keep an eye on your home insurance policy? Have you scored any big discounts? Please share your experiences with a comment.