3 home insurance tips for first time homebuyers

Unless you’re a trader on Bay Street, buying a home is likely the single biggest financial transaction of your lifetime. Between house hunting, making an offer on your home and finding a mortgage, it can be easy to overlook home insurance. But by doing that you’re making a major mistake. Some homebuyers feel like they’re throwing their money away on home insurance when that couldn’t be further from the truth. You’ll be happy you have home insurance if you ever need to make a claim.

Now that you know the importance of home insurance, here are some home insurance tips for the first-time homebuyer.

Tip 1: Shop Around and Save

Imagine you’re buying a new laptop. You probably wouldn’t buy the first laptop you see. You’d take the time to shop around. And you should be treating your home insurance the same way. While your local bank branch may offer you a good deal on home insurance, you won’t know for sure unless you see what else is out there.

Seeing what else is out, there is super easy these days thanks to technology. By shopping around with a home insurance comparison website like Smartcoverage.ca, you’re more likely to find the home insurance policy best suited to you at the lowest possible premiums. Bet of all, you’ll have the peace of mind knowing that your home is protected and you’re not overpaying for home insurance.

Tip 2: Pay Your Premiums Monthly vs Annually

Did you know that many home insurance companies give you the choice of paying your home insurance premiums monthly and annually? As a first-time homebuyer, paying your home insurance premiums monthly can help from a cash flow standpoint. Under this option, the payments are broken up into 12 convenient instalments instead of one lump sum payment all at once. Just be aware that some home insurance companies charge you an administrative charge if you choose to pay monthly.

In cases like these, you might be better offer finding a company that doesn’t charge you an admin fee. However, another option, if you choose to pay annually, is to save the money for home insurance in advance. For example, if your annual premiums are $1,200, you can automatically put aside $100 per month in a high-interest savings account. That way the money will be there when you need it in a year’s time. You won’t be scrambling to come up with $1,200 at the end of the year.

Tip 3: Consider Upping Your Deductible

Not everything in your home insurance policy is written in stone. One thing that you can change is your deductible. (The deductible is the amount you have to pay out of pocket in a financial emergency.) Many home insurance companies set your deductible at a low amount like $500 by default. However, by upping your deductible to $1,000 or even $2,000, your home insurance premiums will, in turn, be lower, saving you money.