8 Great Ways to Save on Your Home Insurance

Insurances are one of your key financial freedom foundation elements. They are very important tools to help you on your wealth journey and serve to protect you and your assets.

The problem is, they are often things we put in place without much thought and are often forgotten about until the proverbial hits the fan. This is when many people discover to late that they are either under-insured, incorrectly insured or just plain – being ripped off. Home insurance is no exception.

As Wealth Chefs we make our money work hard for us and ensure that every bit of it adds value to our lives and serves us. As unsexy as insurances may seem, this is one of the areas I find many of my clients can get way more value out of.

Get out your home insurance policies and see if you can squeeze more juice out of them. There are numerous ways to do this and Wealth Chefs apply them all.

1. Bundle your insurance policies together.
   Get a quote for your home building, contents and car insurance from the same company. This should bring your individual premiums down significantly. Just ensure you compare each component part of the total premium, i.e. how much of the premium is for the building, how much for the cars, how much for content insurance. I review all my insurances annually and phone around for quotes to see if I can get a better deal. Dave and I both have motorbikes. Because of their specific nature it is not always cost effective to bundle the motorbike insurance with the other policies. I always asked for bundled quotes with and without the motorbikes and for each component to be individually specified. This way I can let the numbers tell the story. At the moment, I can get the motorbikes insured cheaper through a specialist motorbike insurance company so I have them outside of my bundled policy. But next year, I’ll do the same exercise again and see what I get.
2. Volunteer to pay an excess.
   An excess is the amount of money you must pay for each insurable event before the insurance kicks in. Choosing a higher excess can significantly reduce your premium. Remember, insurance is to cover you in the event of a major event, its not a savings plan or a nice to have. So many people I know opt for a zero excess option on their insurance and then feel they should claim for every little thing the break or damage. Understand that this thinking comes at a significant cost to you. Each claim you make will push your future premiums up and in extreme cases, where you make a lot of claims, may make you uninsurable with some companies. Choosing a higher excess also makes you more careful with your stuff and really shop around to get the best prices for repairs or replacement. It helps you become more financially competent. In effect you are choosing to self insure the first fixed amount of damage of loss. You do this by having that money in your security soup wealth chef pot. That way the money stays with you if you don’t need to use it and you get even more money to invest due to the lower premium you will pay.
3. Limit your claims.
   Protect your no claims bonus, this can make a significant difference to your premium, as much as 25-45% per year.
4. Find out if you are eligible for any discounts such as:
• having a certain security system;
• having the home always occupied especially if you work from home;
• having dead locks or window locks;
• having fire extinguishes and smoke alarms;
• being over 55 years;

Often, the cost of installing these items pays for itself from the reduced insurance premium. And you get a safer home. It’s a win all around.

1. Find out if you are eligible to belong to schemes for only certain groups of people.
   Some insurance schemes are eligible to only say professional engineers. Because engineers are generally considered pretty boring and conservative and typically make fewer claims than the general population, the whole scheme has lower premiums. Hey, I don’t care if someone considers me boring if it means I save a big chunk on my insurance!
2. Consider pay-by-the month premium options instead of paying an annual sum, but first make sure there is no additional cost for this facility. Ask for a quote with both an annual and monthly payment option and work out the difference. Paying by the month allows you to manage your cash flow better.
3. Avoid additional coverage options and “fancy” add ons unless the are genuinely free inclusions. These options are generally very poor value for you and typically include:
• cover for spoilage in your fridge and freezer
• cover for stolen credit cards
• pet cover
• accidental breakage of glass
• appliance repair
4. Surf for quotes.
   Get a minimum of at least three quotes and do this every year.

We spend 5 days helping you define what 'wealthy' truly means for you and helping you identify your unique Financial Freedom Number in our Wealth Made Simple Challenge. Saving money on your insurances is a great way to learn how to become a Wealthy Spender which is a key financial freedom foundation. 

Sign up for the 5-day Wealth Made Simple challenge!

Enjoy squeezing and please let me know how much you managed to save on your insurance’s without reducing the value to you.