Let’s face it, homes are expensive, even the ones that are mortgage free. You have property taxes, maintenance and improvement costs, operational costs such as heat, hydro and more. For us, we also have some mortgage debt. Add it all up and our home expenses consume a good portion of our after-tax income. There’s insurance as well.
Owning a car while technically an asset is a depreciating asset. There are also maintenance costs for your car, gas isn’t exactly cheap and you have insurance for your vehicle as well.
If you’re going to own a home or car, or both, you might as well get the best bang for your buck. Let’s start saving you money on home and auto insurance today with these tips, getting the best coverage while keeping costs down.
Home Insurance
Insuring your home or condo does not need to cost a fortune so consider these things:
- Increase the deductible! The deductible is the amount you’re willing to pay in the event that you need to make a claim on your policy. Consider putting your home deductible at $1,000 (or more) and self-insure with any amount under that. We’ve done this.
- Are you a professional? Many insurance companies offer discounts if you’re a professional or part of a union. Make sure you reach out to your professional association to find out more.
- Got a security system? Many companies will lower your premiums if you do.
- More birthday cake candles? Getting older has few benefits but one of them means you might qualify for insurance savings. Make sure you ask about this when you’re shopping around.
- Pay annually! It’s usually less expensive when you do although I can appreciate monthly payments are typically easier for budgeting purposes.
- Insure what you must! I like to think of insurance as a risk management tool – it transfers risk from you to somebody else. Your insurance premiums are provided to the insurer in the event compensation is required to cover you from your (eventual?) loss. I think some homeowners can make the mistake of getting too much insurance, too many riders for things they simply don’t need coverage for. Insure what you must, first.
- Avoid pools, pipes and old wiring! Swimming pools are great but they can come at a cost when it comes to home insurance. Same goes with an older home with galvanized pipes and older electrical wiring.
Auto Insurance
Earlier this year, our auto insurance dropped. We own a 15-year-old car and a newer, 3-year-old vehicle. This is a good thing since it seems the costs of other things in our life continues to be on the rise. Your car insurance can be lower if you follow some of these insurance tips:
- Keep the clunker! My 15-year-old Mazda gets me from point A to B quite nicely and given my premiums are going down over $100+ per year I have no intention of getting rid of my older car as our secondary vehicle until it becomes cost prohibitive.
- Stay safe and drive less! Spending less time on the roads, avoiding speeding tickets and other road infractions can only help you (and others) stay safe on the roads. It will also help your wallet. The less time you are behind the wheel the better. Carpool, take public transit or if you’re lucky enough to walk or bike to work – do it!
- Bundle baby! Consider getting your home and auto insurance from the same provider and make sure you get a discount for doing so. We’ve done this.
- Increase your deductible! For the same home insurance reasons above.
- Choose your vehicle wisely! I don’t have all the math top of mind but I know some makes and models of cars are higher insurance premiums associated with them; I’m pretty sure a Honda Civic is less expensive to insure than some BMW.
- Keep it clean – your claim history! It probably goes without saying a clean claims record will keep your premiums lower than not. Try to avoid submitting any claims for small scrapes and damages. Although I can appreciate you want that new car look, feel and smell to last forever it’s a car after all and some wear-and-tear is to be expected.
- Retire and stay retired! Financial freedom can come with many perks and one might be a retirement discount if you meet the insurer’s qualifications.
Home and auto insurance costs will vary between provinces and cities. As long as you live and drive where you are, make sure you shop around now and then to compare quotes and coverage for home and auto insurance that fits your needs. Thanks to my sponsor for contribution to this article. All opinions expressed are my own.
How do you save money on home and auto insurance? What’s your biggest tip?
Mark
My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.
There are many ways to save on insurance. The best thing to do is drive safe, most people are complaining because they have traffic violations and your rates go up as a consequence since the driver is considered high risk. Most of those complaining about rates have DUI’s, reckless driving, running red lights, and the list goes on and on.
Perfect timing Mark! I have to renew my home and auto insurance.
Great Peter – hope the tips helped! I’ve found asking for discounts as well, nicely, can always go a long ways. Cheers.
Hi Mark,
Some good info as always.
Although of our 3 cars, a Hyundai Tucson, a Mazda 3, and a BMW Z4M (by far the most expensive) the BMW is the least expensive to insure.
Cheers
Deane
Thanks Deane. The BMW Z4M is least expensive to insure? You are kidding me I think? 🙂
Answer to John: You cannot call up an insurance company and say your home isworth xxx and you want to insure it for that.
What you do is call the company and they will ask you a number of questions: how many square feet, decks, a/c, fireplaces, heating system, age, premium finishes, etc. Then they do a calculation that will be the re-building cost. And that is what they insure your house for.
You pick from different options for the contents, or sometimes contents are just a percentage value of the structure cost. Don’t forget to check about coverage for various water related pontential problems like sewer back-up, ice damming on the roof.
I am not in the business, but have just paid attention to our insurance needs over the years.
I live in BC, so can’t say anything about car insurance…..
My tip was going to be that on home insurance there is a discount when you have paid off your mortgage, but Dan beat me to it! Yes, it is true. It was only two years ago, but I can’t remember if I had to send them the discharge statement or whether they took my word for it.
Insurance companies love it when you phone them up and ask about things. I actually read my policies and they say that is rare. So I have phoned to complain when the price has risen too much (in my opinion) that year and talked to them about it. They have been great at suggesting ways to lower the premium.
We will also need a new roof/shingles sometime soon, so I asked them about various types and what it might mean for insurance going forward. We have wood shingles now and are considering moving to tile, so I wanted to know. Less fire risk with tile, which is a huge risk where I live, so I want a discount for that!!
After being with the same insurer for over 20 years and no claims (my mom made me get a policy when I got my first apartment at age 19) we had wind damage that blew off shingles on our house in Ontario. The company said that wouldn’t raise our rates, but the next year the renewal cost went up a lot. So I switched to a company that was pitched by our Alumni association and have stayed with them since. Every so often I shop around and make sure the price is competitive.
Thanks for sharing Barbara. We got a discount for our new roof and I would expect you to get the same if you don’t have wood shingles for sure…
I also read my policies, I’m quite nerdy that way 😉
Shopping around is a great thing to do. Insurance companies want your business and should also fight to keep it.
I’ve also heard many insurers give a discount on home insurance if the home is fully paid off. I can’t speak from personal experience but it would make sense as it would reduce risk for an insurer
I have heard this as well and can confirm this happens. Another good reason to be debt free!
Hi Mark
This is more of a question than a comment.
If I own a $400,000 house and the land is worth $100,000, can I buy home insurance for only $300,000? A fire could destroy the entire home, but the land will still remain and would not require insurance.
If possible, that would be a huge savings on insurance costs.
Regards
John
Hey John…my understanding is for some insurance policies, you are ensuring the contents of your home and the structure itself, land is not included in replacement value. So, it would not require insurance. I would need to confirm my understanding of that with other insurance companies other than my own of course!