Do you find that your home insurance premium keeps going up every year even though you haven’t made any claims and your insurer claims to have applied their loyalty discount on your premiums?

Just like with our mortgages, Australians have a tendency to renew their home insurance policies with their existing policy provider without even bothering to get a quote from another provider!

Don’t assume that your insurer is giving you the best discount ­­– get comparison quotes and check if you’re better off with a different insurance company and avoid paying loyalty tax with your current insurer.

Okay, pricing doesn’t mean everything, the level of coverage for any particular event you need covered as standard also matters and the same applies to paying for any risk that you are unlikely to be exposed to.

For this reason, customising your policy to suit your home and its contents is a smart way to save money and ensure your home is safe in case on an insured event occurring.

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Ways to customise your policy

1. Read the terms and conditions: I know, no one actually read the product disclosure statements (PDS) however reading the small print of your policies allows you to understand precisely what you are covered for and what cover is lacking.

2. Add or eliminate assets and what’s it’s covered for: Adding or eliminating assets from your policy is a good idea for some home owners, consider if you really require out of home cover for personal items that never leave your home. You could be paying additional premium to protect items that aren’t subject to the risk you are paying for.

On the flip side, some high value items that you always have in your possession when outside may need to be added to your policy, like your Cartier watch. Doing an audit of items that you want covered externally during your policy renewal period will keep your policy up to date.

3. Increase your policy excess: Increasing your excess on individual policies is a simple yet effective method that investors are using to streamline your policy. For example, if you raise your policy excess from $600 to $1000, you will be required to pay less on your premiums – although you’ll pay an extra $400 as your excess if you make a claim.

Policy holders embarking on this strategy should ensure they have the cash flow to pay the increased excess on any claim. At the same time, they should accept they will have to pay out of their own pocket all small claims so as not to raise their risk level in the eyes of their insurer – and potentially attract higher premiums as a result.

4. Pay your premiums annually: Have you noticed how it’s always cheaper to pay your premium annually when compared to your annualised monthly payments?

Annual premium payments require a lump-sum payment each year for the policy’s renewal, but when insurers charge up to 15 percent ‘service’ fees to pay monthly, the savings achieved by making an annual payment can be quite significant.

Customising your home insurance policy for your property has the added benefit of ensuring that all your important items are covered for the potential risk they are likely to be exposed to.

Remember, you are taking out an insurance policy to protect your biggest asset, read the PDS, get quotes from at least three different insurers at every renewal and select the policy that not only protects your home but provides you with the greatest premium savings as well.

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This article does not constitute advice; readers should seek independent and personalised counsel from a trusted adviser that specialises in property, a tax accountant and property design specialist.