The more you can reduce an insurer’s level of risk when it comes to your insurance, the less the premiums may cost in general. However, this can mean putting yourself at risk of finding yourself underinsured and/or having to pay for damage to your property out of your own pocket following an insured event.
Total replacement or sum insured?
Total replacement home insurance cover is often more expensive than sum insured cover, as the insurer pays to repair or rebuild your home if it is damaged, no matter the total cost, while sum-insured cover puts a maximum cap on how much the insurer may pay.
You may be able to further lower your premiums by reducing your maximum sum insured amount, though this could leave you at risk of being underinsured when the worst happens.
Adjust your excess
Your insurance excess is the amount you’ll pay out of your pocket when you make a claim. You can often adjust the excess in your insurance policy, which may affect the premiums you’ll pay.
Choosing to pay a higher excess when you make a claim in the future can mean you’ll get to save money on your insurance premium today, though this could hit your household budget harder at a time when you’re already under pressure.
The reverse is also true – if you can afford to pay a higher premium, you can opt for a lower insurance excess, so more of your claim is looked after by the insurer.
Carefully consider the optional extras
Many home insurance policies are filled with additional coverage options, which may sound very appealing to some customers. For example, this could include covering motor burnout, accidental damage, or covering your home’s portable contents.
But think long and hard before adding any of these extra offers to your policy, as you could end up having to pay more for your insurance now and in the future. Consider the value they may add to your policy and if this would be with the extra cost.
Avoid making claims if possible
When you stick with the same insurer for several years without making a claim on your policy, the insurer may offer a discount on your insurance premiums. This no-claim bonus or discount may be reduced or removed if you make a claim in the future. You may even be able to access a no claim discount when you switch insurers by providing details of your claim history.
Stay loyal and take out multiple policies
Some insurers offer a loyalty bonus that can discount your premiums if you stay with the same insurer for several years. You may also receive discounts if you take out additional insurance policies with the insurer, or other financial services if the insurer is part of a bank or other financial institution.
Switch to a new insurer for a bonus discount
Some insurers may offer an introductory discount to new customers to encourage them to switch policies. Keep in mind that this offer may only last for the first year of holding the policy, so the costs could rise after that.
Choose home only or contents only insurance
If you don’t need a combined home and contents insurance policy, opting to only insure your home or its contents could cost you a little less.
For example, home insurance is often required to apply for a mortgage to buy a home, but contents insurance may not be essential. On the other hand, buying a strata unit means you should already be covered by the building’s strata insurance, so you may only want a contents insurance policy.
Go online
Some insurers offer discounts to customers who apply for insurance policies online, as it saves them some admin costs when processing your application.
Pay the premium annually
You may be offered the option to pay your insurance premium as one lump sum, or as monthly instalments over the course of the year. While each instalment may be a smaller hit on your household budget, it may be cheaper in total to pay the premium as a lump sum.
Improve your home security
Adding locks and bars to your doors and windows, or installing security cameras, motion sensors or alarm systems in your home, can help reduce your risk of experiencing a break-in, home invasion, or other crime. Because this can help reduce the chances of making a claim, the insurer may discount your policy further.
Use your seniors card
Older Australians may be able to use their Seniors Card to access a discount on their home insurance policy with selected insurers.