If home and contents insurance is taking an increasingly big chunk out of your budget, here are some tips for cutting the cost without cutting the cover.

Looking for cheaper home insurance? Home insurance providers take several variables into consideration when determining the premium you have to pay to get the level of cover you want for home and contents insurance. We’ve put together an explanation of the most important variables insurers use when determining how much you should pay, and a shortlist of a few ways you can save on home insurance. 

What makes home insurance cheaper?

Covering everything from our possessions, to travel and our lives, insurance policies are one of the few services that we pay for, but hope never to use! If you’re a homeowner, then home insurance as well as contents insurance, is something you really should have. Even if you’re just renting, contents insurance will save you money in the event of theft,  destruction or an accident.

You don’t necessarily want the cheapest home insurance product available, because there’s a lot more to a good quality insurance product than price alone. But you do want to get the right balance between price and features. So here are five quick tips for helping to reduce the cost of your home and contents insurance.

Five ways to save on home insurance

1. Take advantage of multi-policy discounts

In New Zealand’s competitive insurance market, insurance firms fight hard over every insurance contract, offering online discounts and sign-up deals to encourage customers to switch. But to prevent their current customers from switching, many insurance firms encourage customers to have all their different policies (such as home, contents, car, boat, etc.) with them by offering multi-policy discounts. These discounts may then be applied to each of your insurance products, cutting premiums all round to result in some serious savings!

2. Ask for a loyalty discount

If you’ve been with the same insurer for a number of years, it could be worth calling up and asking for a loyalty discount, particularly if you’ve been a good customer – i.e. you haven’t made many claims. Some insurers offer such discounts automatically, but if you’re not sure, it’s worth asking the question. Even a discount of 5% or 10% can save you a respectable amount of money.

3. Choose a higher excess, if you can afford it

You can lower the cost of your premiums by opting to pay a higher excess in the event that you claim. The excess is the amount of loss that you will need to cover from your own pocket before the insurance kicks in. Remember, though – you will need to cough up the excess amount when you make a claim, so you need to ensure that you can easily access that amount of cash.

A higher excess means you’ll be less likely to make a claim, as you might wonder whether it’s worthwhile for less expensive damages or losses. You shouldn’t have to pay out of pocket for things that your insurance covers. You can check the amount and type of excess that applies to your policy by looking at your Certificate of Insurance.

4. Discount for safety features and home security

Taking action to protect your property against burglary or destruction can help to reduce the cost of your home and contents insurance. So if you have installed security alarms, deadlocks or smoke alarms, ask your insurer to reduce your premium.

Home security is more relevant for contents insurance. The more deterrents there are for a would-be burglar at your home, the lower your contents insurance premiums will be. A baseball bat under the bed or the family guard dog won’t cut it as far as your insurer is concerned. Instead, you could consider installing security screens on all doors and windows, a home alarm system, home alarm monitoring, or smart security system, etc. 

5. Don’t just pay your renewal

Don’t set and forget! With premiums changing year to year, it’s important to shop around each time your policy is up for renewal. Check out Canstar’s star ratings report and you might be surprised what you find. It’s definitely worth checking out your options – there are potentially plenty of ways to save on home insurance. Compare Home and Contents insurance policies with Canstar by clicking below:

Compare home and contents insurance with Canstar

Other home insurance premium factors

We’ve discussed the excess you choose and your home safety and security measures above, but here are some other factors that can influence the size of your insurance premium.

1. The sum insured

How much insurance do you really need? Basically, the larger the sum insured the higher the premiums you pay – which makes sense! But it’s important to note that doubling the amount you’re insured for doesn’t mean you’ll double your premium. This can be a misconception among a significant proportion of the insured population, who have a tendency to under-insure their home and contents.

Make sure your cover is enough to replace all your possessions in the event that your home is destroyed. It may not cost as much as you think. You can find your “sum insured” on your Certificate of Insurance.

2. Where you live

Different places have different risks for certain events, such as flooding, and, in terms of contents insurance, burglary. The risk factors are based on past experiences and the number of claims that insurers have previously had to pay for homeowners in your particular suburb or region. The more common these kinds of events are in a particular area, the higher the risk perceived by your insurance company and, accordingly, the higher the cost of your premiums.

3. The oldest person living in the house

Believe it or not, sometimes age does have its perks. From an insurer’s perspective, older people are often viewed as being less risky for certain events. This point is pretty self-explanatory, but just to be clear, it doesn’t mean you should go borrow Grandma from the old age home just before buying your home insurance. Rather, in general, a 45-year-old couple is perceived as being a safer bet than a 25-year-old couple when it comes to risk of damage to the property.

About the author of this page

This report was written by Canstar Content Producer, Caitlin Bingham. Caitlin is an experienced writer whose passion for creativity led her to study communication and journalism. She began her career freelancing as a content writer, before joining the Canstar team.

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