If you have recently purchased a house or are considering it, sincere congratulations are in order! Buying your first home is a significant milestone that is proof of your financial success and responsibility. At this point, you might be thinking, “Thanks, but does that mean I can save money on my car insurance rates now?”
Unfortunately, the answer is a little more complicated than a simple “yes” or “no.” Still, the good news is it’s likely that, at the very least, you’ll be able to save money on insurance by bundling your home and auto insurance policies.
How do home and auto insurance bundles work?
Home and auto bundles are a common perk that insurance companies extend to insured homeowners and renters alike. If you haven’t already spoken to your insurance company about bundle discounts for home and auto insurance, it’s never too late to start saving money!
Bundle discounts vary between insurers. For example, aha insurance is a brokerage that can help you find the best insurance coverage by comparing policies from several top Canadian insurers. With aha insurance, you can save up to 50% on home insurance and up to 18% on car insurance when you bundle your policies.
My credit score helped me get a good mortgage rate. What impact does my credit have on what I pay for insurance?
As a homeowner (or an aspiring one), you know that having a higher credit score can help you lock in a mortgage with lower interest rates. Consistently making your mortgage payments is also one of the best ways to help you boost your credit score. That same credit score is also a crucial factor that home insurers may use to determine how much you’ll pay for home insurance.
Just like with the mortgage application process, your credit score can be an indicator to insurance companies of your financial health and ability to pay your policy premiums consistently.
So a good credit score can help me save on car insurance too?
Sometimes, but not in all Canadian provinces:
- In Ontario and Newfoundland and Labrador, it’s illegal for insurers to consider credit score information when calculating your car insurance rates.
- Provinces like British Columbia, Manitoba and Saskatchewan have regulated auto insurance practices that generally don’t include credit score checks.
- In New Brunswick and Quebec, checking credit scores to calculate auto premiums is legal but uncommon.
- Auto insurers operating in Alberta must have your consent to check your credit score.
- In Nova Scotia, your credit score information can be considered, but car insurance coverage cannot be denied due to a low score.
If my credit score is temporarily lowered by financing my home, could that affect my home and auto insurance?
Don’t worry if your credit score isn’t as high as you would like it to be – the Insurance Bureau of Canada has created a Code of Conduct for Insurers’ Use of Credit Information. This code is designed to protect you from insurers performing credit checks without your expressed consent and denial of coverage due to a lack of access to your credit information.
Your good credit history can help you save money on both home and auto insurance in some provinces. However, it shouldn’t prevent you from obtaining home or auto insurance at an affordable price, provided that you’re not deemed a high-risk customer for other reasons.
Let’s take a look at those other factors that contribute to your home and auto insurance rates.
Technically, home and auto insurance are separate policies governed by different risks, which means insurers are looking at independent factors when calculating your home and auto insurance rates.
For example, the distance of your home from the nearest fire hydrant and fire station is considered when insurers underwrite your home insurance. However, insurers are much more interested in your driving history, including past tickets and accidents, as well as how long you’ve been driving and the type of car you drive when they prepare your auto insurance policy.
Moreover, having a teenager who just got their license and plans to drive your car won’t impact your home insurance premiums. Still, it will very likely result in at least a slight increase in your auto insurance premiums.
If your new home is closer to work, you may be eligible for an auto insurance discount, as a shorter commute likely means less time in rush hour traffic and a reduced risk of accidents. But, at the same time, a shorter commute isn’t something insurers consider while calculating the price of your home insurance.
Your car and home may both be well-maintained and decked out with the latest safety equipment. Effective maintenance and safety features can help you save money on home and auto insurance and increase the likelihood that your insurance company will accept your claims. Still, regular car maintenance and safe driving technology won’t impact what you pay for home insurance, while making sure your home is safe to live in and well taken care of won’t reduce your auto insurance rates.
Similarly, if you have a claims-free home insurance record from your previous home insurance policy, that can help you save when you purchase a policy for your new home. Still, that claims-free savings boost for your home insurance won’t impact your auto insurance premiums.
However, if you just bought a house, one main factor could potentially help you lower your car insurance rates: It does all come down to location, location, location.
What about factors that affect both home & auto insurance?
Sometimes you may need to make claims on both your home and auto policy simultaneously. For example: severe flooding in your neighbourhood could cause you to make a claim on your auto insurance policy for vehicle repairs or replacement and a home insurance claim for items in your basement and vehicle that were damaged. Moving to an area with a lower risk of flooding could reduce the likelihood that you’ll need to make a claim on either your home or auto policies and help you save on premiums for both.
Moreover, if you’ve moved to a location that’s easily accessible by emergency vehicles (for example, close to a fire station) and surrounded by relatively low-traffic and well-maintained roads, you may be able to save on both your car and home insurance either separately or bundled together.
Finally, suppose your new home has a secure garage big enough to fit all of your family’s vehicles when your previous home required you to park them outside. If your home is also equipped with a centrally monitored alarm system to protect everything inside, including your car, you may be able to save additional money on your home and auto insurance due to your home purchase.
Buying a house is a monumental step that requires a great deal of careful consideration, including the effect your purchase will have on what you pay for home and auto insurance. Now that you know how you could potentially save money on auto insurance as a homeowner, the next step is to speak with your insurance provider about potential savings available for your unique living (and driving) situation.
To ensure you’re getting the best home and auto insurance rates, you may also want to get quotes from other insurers to find out how much you can save when you bundle your home and auto insurance.
HBFS is bringing you the best coverage and services for your home and car insurance needs with aha insurance. Save up to 50% on home insurance and up to 18% on car insurance when you bundle your policies. Get a bundled quote today and receive 750 Hudson’s Bay Rewards points. Get your low home & car insurance rate online in 3 minutes or call us directly at 1 (855) 242-6822.
Bundle and save today with home and car insurance coverage in Ontario, and get started with an online quote or call aha insurance at 1 (855) 242-6822.