Home Insurance Smart Guide

4. Lower your premiums

What you'll learn in this step: there are ways you can lower your premiums.

There are a number of ways you can lower your insurance premiums for example, by shopping around insurers for the best rate or by installing a burglar alarm to give you a higher security rating.

Shop around

There are some givens when it comes to the level of your insurance premium: if you live in a timber house on the edge of the bush, youll pay a higher premium than someone in a brick house in a city suburb; if you live in a suburb with a high car-theft rate, youll pay more for vehicle insurance than if you lived in a low-crime area.

That said, the premium youll pay comes down to the claims experience of each individual insurer. One insurer will treat one postcode as higher risk than another insurer solely because of their individual claims experience. That means it pays to shop around to find the insurer offering the best rate for your postcode.

Claims history

Your history of claims affects your premiums. If youve made no claims you may qualify for a no-claims bonus a discount on your premium that can range from 25 per cent on a home contents policy to 60 per cent on your car insurance. Weigh up whether it might be better to forgo a relatively small claim on your insurance for the sake of keeping your valuable no-claims bonus.

Security measures

Smoke alarms, burglar alarms, window locks and deadlocks can all help to reduce your premiums. You can reduce your premium by as much as 15 per cent if you install a back-to-base alarm system but balance the cost of the alarm system against the saving on your premium.

Excess

Most insurance products now allow you to choose what level of "excess" youre prepared to meet. The excess is the amount youll meet yourself before your insurance starts paying out. For instance, you might say youll meet the first $200 of any loss, with the insurer to cover any amount above that. The higher the excess, the lower the premium.

Group discounts

If you have more than one policy with an insurer say building, contents and car insurance youre likely to qualify for a discount. These discounts can add up to a worthwhile amount when there are multiple policies. But shop around to make sure you wouldnt be better off getting three cheap policies from individual insurers. Dont buy expensive policies from one insurer for a discount that doesnt outweigh its higher premiums.