Home Insurance Q&A

What determines the cost of home insurance?

There are a lot of different factors that go into determining the cost of home insurance. 

Here are some things to think about.

Your credit score – Yes, your credit does play a factor.  Depending on how your credit is, you can get big discounts with certain companies.  Some can be as high as 80%!  This is called your Insurance Score.  Now, if you have “bad credit” you won’t be charged more, you just may not receive as big of a discount.  Something to keep in mind is that this is a “soft” credit check, it has no impact on your credit score.  If you were to look at your credit report, it would show up as a “promotional inquiry”.  This is optional, however if you decline, your price may be more expensive than if you had provided your consent for the insurance score and had bad credit.

Updates – Electrical, Plumbing, Heating, Roof, if any of these have been updated, let your insurance company know.  Most companies are providing a rate based on each individual risk factor in your home.  For example, if your home was built in 1950 and you don’t tell your insurance company that the electrical panel was updated in 2015 to 200-amp breakers, you’re most likely paying for the risk associated with an old electrical panel. 

How can I reduce my home insurance premiums?

Another factor in determining the cost of home insurance is based on how long you have had prior home insurance, or, Tenant insurance.  If you are considering buying a home in the future, do yourself a favour and get Tenant insurance.  Not only will it provide coverage for your contents now, it might end up saving you hundreds of dollars when you purchase your first home.

What is not covered by homeowner’s insurance?

Most insurance companies offer a few different types of homeowner policy’s.  When it comes to your home insurance, pick the one with the most coverage.  You don’t want to skip out on home coverage to save a few bucks.  There all always exclusions, make sure you ask lots of questions. 

One of the biggest changes in homeowner’s insurance in recent years is the addition of Overland Water and Sewer Backup coverage.  This is becoming more and more important with our Nova Scotia weather.  This coverage typically needs to be added to a homeowner’s policy as “Extended Coverage”.  Some companies offer a set limit for this coverage, others will provide the full limit of the dwelling value.  Do your research, ask questions, and make sure you understand what’s covered and what’s not.

Potential insurance issues for snowbirds? And what you should do before making the trek south?

If you are travelling or will be away from your home for more than thirty days, your insurance company may classify that as “Vacant” and as such, may not insure loss or damage to your dwelling and contents.   Every company will have their own set of rules which you will want to look into before departing.  Some companies require you have someone check on the home every so often, as well as shutting off the water supply while you are away.  As for anything to do with insurance, it’s always best to ask your broker.

Ian Brown, Account Executive Home and Auto, Cluett Insurance (902) 220-4493