On the flip side, if you've kept your coverage with a company for several years, ask your insurer if it offers a loyalty discount. Such discounts typically range from five to 10 per cent.
While your home and its contents are at risk from fire, theft and other perils, the land your home sits on is not. So, don't include the value of the land when deciding how much home insurance you need to buy. (You won't have much choice if you have a big mortgage, since lenders want the full amount of the home insured. Once you pay off your mortgage, make sure you apply for the mortgage-free discount of five to 10 per cent.) An insurance broker can help you figure out the replacement value of the building.
Smoking accidents account for thousands of residential fires every year. If no one in your household smokes, make sure you tell your broker so you'll get the non-smoker's discount (as much as 15 per cent).
Choosing a newer home could help you save five to 15 per cent. Insurance companies also look at the home's proximity to emergency services such as a fire hydrant or fire station, as well as the type of building material used. Deadbolt locks, burglar alarms and smoke detectors also bring discounts. Install a home security system and you could be looking at five to 15 per cent off. Check with your insurer first to see which systems it recognizes.
Since you want your policy to always reflect the value of your home and belongings, review it every year and make sure it remains current with your present holdings.
Financial expert Gail Vaz-Oxlade's latest book is Dead Cat Bounce: The Skinny on e-Vesting (Prentice Hall).
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