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Home ownership is a symbol of success and of the Canadian dream. However, it also makes you susceptible to additional costs. Home insurance protects you from a number of physical damage risks such as fire, theft, hail and windstorm as well as personal liability lawsuits.

The premiums you pay for home insurance protection are based in part on the funds paid into the insurance pool less any claims for losses that policy holders experience. Your premiums are also based on the insurer’s calculation of the risks to your home. As everyone does not pay the same amount for home insurance, there are steps you can take to reduce your risk of needing to bring a claim, which will in turn reduce your premiums.

The main aspects considered by insurers in determining your home insurance policy rate include the location of your home, costs to rebuild, the age of your home, any special features, your home’s use, your claims history and credit history. Your age, whether you are mortgage-free, and how long you have resided at the address are also considered by insurers as are your insurance needs. These are all explained in detail below.

The Location of Your Home

The first factor any insurer will consider is location. There are higher risks in some neighbourhoods or communities that lead to higher premiums, such as where crime rates are higher, the infrastructure is poor (e.g., sewer system), adverse weather conditions or there is too much distance and isolation from other homes. Conversely, being closer to a water source (e.g., a fire hydrant) and fire station will often lead to a reduction in premiums.

The Cost to Rebuild Your Home

Your insurance premium will depend in part on the cost to rebuild your home if it were completely destroyed, such as from a fire. As a result, premiums are higher for a luxury home with high-end fixtures, materials and valuables.

Keep in mind that the rebuilding costs often differs from the home’s purchase price because it includes factors such as rising or falling construction costs in the area and debris removal, however it does not include the actual value of the land itself. Included in the cost of rebuilding is the labour cost, building materials and accessibility of the property as well as any special costs incurred from bylaws or hiring specialty contractors.

The Age and Condition of Your Home

Newer homes typically have lower premiums because the plumbing, wiring and roof are in prime condition, which typically means much fewer claims. Older homes sometimes have inferior or degrading materials that may cause problems. If your home uses oil as its primary heat source and wood for secondary heat source, you will also face a higher premium because of the risk of fire loss.

Preventative measures can help to reduce your insurance rate, including using a monitored home alarm system service and installing a sump pump and back water valve.

Special Features of Your Home

Homes with pools typically cost more to insure because of the added dangers and third party liability risks. As well, homes with unique architectural features tend to cost more in insurance because they could be costly to replace or repair.

Insurers also consider the material that your home was constructed with. Almost all homes are built from a wood frame but exterior siding can also play a part in the rating factors as some are more fire resistive than others such as hardy board. Also homes made entirely of wood such as log cabins are not only much more flammable but are also very difficult to rebuild and often require major reconstruction.

Your Home’s Use

You may think there is only one way to use a home – by living in it, but there are a variety of ways people use their homes that can affect their house insurance in Edmonton. For example, vacant homes are more likely to be broken into and vandalized, so the premium is higher. Homes that are also used for business are also be subject to a higher premium, as the assets of the business will also require protection under the policy.

Many homeowners rent out a basement apartment or a room in the home as a source of income. Before doing so, check with your insurance broker on how this will affect your insurance, as your home may be considered a multi-family dwelling, which also rates your insurance rate.

Claims History

If you live in a neighbourhood that has been hit by a high number of tornadoes or burglaries, you might face a higher home insurance rate.

Your own claims history will also impact your premium, especially if you have a pattern of home mishaps and claims. On the other hand, if you’ve been a responsible homeowner for years, you insurer will tend to reward you with a lower rate. Many insurance companies offer discounts based on the number of years you have been claim free under your home insurance policy.

Credit History

Your credit score also affects your insurance rate. If you have had financial difficulties or are having trouble paying your bills, you may be seen as being unable to maintain repairs and general maintenance on the home, leading to a greater risk of damage and claims.

Your Age, Mortgage Status & Length of Time You Have Lived in the Home

Older owners who are mortgage-free and have lived in the home for a long time tend to have fewer claims. It may be viewed by the insurer that, because of these factors, you having more funds available for the proper upkeep of the home, which can reduce the risk of a major claim.

Your Insurance Needs

The amount of insurance you need in Edmonton will affect your premium. A luxury home will cost more to insure, for example, than a more modest home. A rider that insures high valued items separately will also cost more than otherwise.

Your insurance coverage and deductibles also affect your premiums, which can be lowered by increasing your deductible, bundling your home and auto policies and shopping around for better rates. Speak to our home insurance brokers in Edmonton about finding a competitive rate based on your circumstances.

How MBS Insurance Brokers Ltd. Can Help

Whether you are in the market for your first home insurance or you are concerned about increases in your insurance from a prior insurer, we can help you to find affordable insurance protections that you need. At MBS Insurance Brokers Ltd., our home insurance brokers in Edmonton are committed to providing excellent customer service and can help you when you need to make an insurance claim. We partner with the best insurance policies in Canada and represent only financially stable insurance companies. Contact us for insurance in Edmonton today, at 780-436-7880.

How an Insurance Broker Saves You Time and Money

Do you know the benefits of an insurance broker?

Suppose you’re looking for the best insurance coverage at the best rates in Edmonton. In that case, you’ll first want to understand the benefits of an insurance broker and how they can help protect you in all sorts of different situations – whether it be saving you money, time or giving you simple peace of mind.

What Are the Benefits of an Insurance Broker?

Here are some of the many benefits of an insurance broker.

 

1. Saves Time

An insurance broker does all the work for you, so you don’t have to spend your valuable time shopping around for insurance. Instead, you simply provide your broker with information about your needs, and they shop the markets on your behalf.

 

2. Saves Money

Insurance brokers work with many different partners to find the best deals on the insurance that works for you. They take all your needs into account and make recommendations that are in your best interest. They have relationships with many insurance partners and can negotiate competitive rates and discounts, saving you money in the long run.

3. Expert Knowledge and Advice

An insurance broker provides you with the support and expertise you need to find coverage that suits your needs. They work with various products and services to find the coverage that best suits you. In addition, they can draw from an extensive knowledge base and experience to advise you on the best options. 

Insurance Brokers provide expert and unbiased advice. A wealth of knowledge about coverage and market rates combined with expert risk assessment ensures your possessions and business are adequately protected. Whether you are looking into auto insurance rates, tenant insurance, or home insurance rates, your insurance broker can help you every step of the way.

You can utilize their expertise to quickly identify your options and rely on their unbiased advice to help you make the best-informed decision for your situation.

 

4. Working For Your Best Interests

Since insurance brokers do not work with one particular company, they have nothing to gain from recommending a specific product. The insurance company also pays them a standard commission. Thus, there is no financial incentive to choose one insurer over another.

Insurance brokers have your best interests in mind. You can count on them to find you the best rate possible, which can give you the peace of mind you need. You can rest assured knowing that if you ever need to file a claim, one of our brokers will be there by your side to guide you every step of the way. They act as an advisor on insurance-related matters. They will shop the market for the best coverage and rates for you. Since fulfilling your needs is their only priority, they will provide independent, unbiased advice on the right coverage for your situation.

5. Privileged access and rates

Insurance Brokers have access to a wide selection of the best insurance companies in the country. These insurance companies are only accessible by Insurance Brokers. They do not deal with the public directly or with Direct Writers. Brokers enjoy long-standing relationships with these insurance companies. Still, they do not have an affiliation with any specific insurer, enabling brokers to provide you with a broader range of options at competitive rates.

 

6. Transparency

Insurance brokers must give full disclosure about their compensation and its effect on your insurance premium.  They are also required to declare any financial links with specific companies that may be a conflict of interest, enabling you to make the best-informed decision.

 

7. Risk and Advocacy Experience

Extensive experience dealing with different clients and claim situations equips insurance brokers with a broader perspective on how to reduce your risk. Also, in the event of a claim, you can count on your broker to act as your advocate with the insurance company and handle your claim fairly and promptly.

Speak to MBS Insurance in Edmonton about your Coverage

Reach out to MBS Insurance today to determine your home, auto, and commercial coverage options. Over the past 45 years, our experienced team of insurance brokers in Edmonton has earned the trust and loyalty of our clients by delivering superior products and services. We understand your needs and provide you with the best protection and rates.

There are many benefits of an insurance broker. We can help you understand the intricacies of your insurance plan while saving you money at the same time. We are a trusted insurance provider in Edmonton and provide personal and commercial insurance policies to people living in Alberta. We offer the best rates on recreational, auto, property, commercial, and group insurance policies. 

Contact us online for a free quote or by phone at 780-436-7880.

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This article was originally published on October 7, 2016, and updated for 2021.