While getting insurance isn’t the most exciting part of owning a home and car, it’s a necessary and crucial step. Your insurance is not meant to be a luxury, but a necessity that will protect you from financial ruin in the event of damage, collision and theft. Also, most Australian mortgage companies require you to have insurance cover (for home ownership it must cover the full or fair value of your property) and will not lend or finance a real estate transaction without sufficient proof.
Finding insurance can be tricky, so we advise you to do enough research on the different types of insurance cover to ensure you get the best value. However, before you even begin the process of purchasing insurance coverage (such as your insurance), there are several things you need to take note of. Read on to understand what insurers are looking for and how you can budget realistically so you don’t miss out on proper coverage.
What attributes do car insurers look for?
Insurance professionals take note of a few attributes in the negotiation and contract process to discern your level of risk – which they will then use to calculate the prices they will offer you.
Driver description and profile
Your premium is influenced by your driving history, driving experience and age. Past incidents and violations such as accidents, traffic tickets, or even adding a teen driver to your insurance could increase the price of your coverage since the insurer classifies you as a higher risk.
Credit scores and files
Although some states prohibit the use of credit scores to set premiums, many states still do. Insurance companies and providers believe that an individual’s credit profile is often a reliable indicator of the likelihood of having to shell out money for insurance claims.
The general rule for more expensive cars is that their insurance premiums will be higher for the simple fact that luxury models cost more to repair and replace. High strength and faster cars will also be offered higher bounties as they pose greater danger.
Weather and natural features in your area
Higher rates are caused by local weather conditions, traffic patterns and other factors that increase the risk of claims. For example, if severe storms in your area have resulted in a high number of auto insurance claims, your business may ask your state insurance agency for an overall rate increase to reflect its increased risk potential. Customers in places where accidents are much more frequent are inclined to spend more.
What attributes do home insurers look for?
Home insurance companies rate properties based on the level of risk they carry. Several factors can influence the overall rating and outcome of this inspection, such as the size, location, and age of the home.
The inspection begins with taking general measurements of the property. Insurance inspectors will inquire about the age of the roof, examine the exterior of the home, and inspect the gutters to make sure everything is working properly. They might even ask if there are any dogs and what their temperament is.
While newer homes often skip this step, older homes will usually undergo a thorough interior inspection. Inspectors are almost certain to enter the attic first to inquire about the condition of the roof covering and any potential ventilation or moisture issues.
Then they will also check ceilings, floors, walls, windows, stairs, closets, and basements. We recommend decluttering before the home inspection begins, as excessive clutter impedes movement and delays the entire process. Plus, who doesn’t love a tidy home?
Wind attenuation inspection
The insurance inspector will then examine the weather resistance characteristics of the property. This gives them a general idea of a house’s sturdiness and stability in extreme weather conditions. These features can range from doors to roofs and even window coverings.
Four point inspection
If your home is over 30 years old or older, you cannot skip this step. This inspection point focuses on the most problematic areas –– plumbing, roofing, electrical and HVAC.
Complete home inspection
While most inspections typically fall within the four-point inspection mark, some may require a deeper, more in-depth analysis of the condition of the property – what we call the full home inspection. In addition to the aforementioned checks, this would involve a review of the architectural features of the property, potential system issues, and the structural integrity of the location.
Additional cost saving options
Car insurance coverage
Comprehensive insurance protects against vehicle damage and theft caused by storms while collision insurance covers damage caused by an accident. If your annual premiums meet or exceed 10% of your current vehicle valuation, we suggest removing Collision Coverage and Comprehensive Coverage. If you leave it as is, you could end up spending more, in the long run, to repair or replace your wrecked, wrecked, or stolen vehicle.
On the other hand, increasing your collision and comprehensive deductibles by an additional $500 can lower your premium by 11% on average. However, you will need to be prepared to pay more cash if you end up in an accident.
Also, if you have another vehicle to use while your vehicle is being repaired, you will not need to purchase Lease Reimbursement Coverage. You can also avoid buying roadside assistance coverage if you are already a member of a better performing auto club.
Home insurance coverage
Purchasing and maintaining a security system can help reduce a homeowner’s annual premiums by five percent or more. To get this discount you will need to provide proof (in the form of an invoice or contract) that you have installed some form of central monitoring. Plus, installing smoke alarms can save senior homeowners up to 10% in annual premiums. This includes sprinkler systems, CO2 detectors, weatherproofing and deadbolts.
It is common to find insurers offering discounts of 10% and more to customers who take out several insurance contracts (such as health or car insurance). You could end up killing two birds with one stone!
In addition, we recommend that you plan for any potential renovation projects that may take place, such as doing sufficient research on the materials that will be used. For example, wood frame structures require higher costs due to the risk of flammability, while cement or steel frame structures have lower costs due to fire or weather resistance.
Finally, if you are planning to install a swimming pool, we strongly advise that you also take insurance costs into account. In fact, swimming pools (and other potentially dangerous devices such as trampolines or diving boards) can increase annual insurance costs by 10% or more.
Be diligent and regularly review your current insurance to continue to actively seek better prices. Don’t let insurers charge you a higher premium for factors you could have managed and controlled. Good shopping!