Create a budget for home and tenant insurance.

by Credit Canada on November 24, 2015

create a budget for canadians

There are two ways to look at home and tenant insurance and its best to asses each when creating a budget. The first has to do with what you spend on the insurance. The second concerns how you stand to benefit from insurance should you need to make a claim. 

Let’s start by examining home and tenant insurance purchases. Understand that in Canada some 120 insurance companies offer home and tenant insurance. That means insurance prices are flexible and that you should shop around. Get quotes from several companies. And while you’re at it, maybe get an insurance broker. Brokers deal with more than one company and are better able to compare prices and benefits. They can tell you what’s good about one policy and bad about another (for instance, exclusions that might make the policy less than ideal for you).

There are ways to save on the cost of home and tenant insurance. One way is to offer to make just one company your one-stop shop, as it were, for insurance.

A further financial consideration in obtaining insurance is something called the deductible or the out-of-pocket amount you must spend in the event that you need to make an insurance claim. Of all the factors that can increase the amount you pay on your monthly premium your deductible is one of the most important so if possible it is a good idea to work out a small payment in your budget creation to put aside enough money to cover the deductible should you ever need to. Most home and tenant insurance policies provide for a minimum deductible of $500. In the event of a loss covered by your policy your insurer subtracts the deductible from the amount of the benefit you receive. If you can swing it in your budgeting increase your deductible to $1000 or even more. Doing so will lower your monthly premium. Just be sure you can cover the deductible should the need to do so ever arise.

There are ways to save on the cost of home and tenant insurance. One way is to offer to make just one company your one-stop shop, as it were, for insurance, meaning you combine your home or tenant insurance with your car insurance and/or insurance for other items you might possess (e.g. a second car or a motor boat). Placing more or all of your insurance with one company is sure to get you a better deal. If you wish to insure an older home you can help keep premium costs lower by making repairs, home upgrades, and by installing alarms that reduce the risk of damage and theft.

There may be ways to negotiate the price of a policy down so keep this in mind when you’re creating your budget. For instance by paying annually rather than monthly you might shave off an amount equivalent to one monthly premium payment.

Many other factors concerning your home or rental property bear on insurance prices: the configuration and location of your residence and property; all possessions and contents of value within; accidental damage and injury to others; and more. The many facets of the structure you inhabit, what you own, and what you have done to reduce risks will be deciding factors in your policy and the price you pay for it.

Remember that from the outset of purchasing insurance there may be ways to negotiate the price of a policy down so keep this in mind when creating your budget. For instance by paying annually rather than monthly you might shave off an amount equivalent to one monthly premium payment. Don’t be hesitant to ask brokers or insurance company agents about what you can do to get a better price. It’s just smart budget creation for Canadians.

When you compare how much you stand to lose if you are not protected, the cost of home and tenant insurance should strike you as very reasonable indeed.

Which brings us to our second angle on how home and tenant insurance can influence your finances – this from the viewpoint of what you stand to gain financially from being protected.

When you compare how much you stand to lose if you are not protected, the cost of home and tenant insurance should strike you as very reasonable indeed. Restoration costs associated with damage from say a fire, or the theft of valuable goods from your premises can easily pale in the face of relatively small deductibles and monthly premiums.

Home and tenant insurance should be part of your monthly budget like the cost of food and shelter.

* Blog content provided through the support of platinum sponsors of Credit Education Week Canada’s Focus Magazine.



debt consolidation for retirement

Canadian lifespans are increasing and living into your late 70s is now a possibility. That means special attention needs to be given to financial choices made well in advance of retirement to address debt problems. If multiple debt problems exist then debt consolidation may be a wise step.  To this end a reality check is in order involving some important questions involving retirement savings.

What’s the story today on financing retirement?

Many young adults today face the challenge of choosing between buying a house or saving for retirement. It would be nice to do both, but that’s not easy when you’re up against paying back student loans, credit card loans, and any other loans while looking for work in a weak job market. These are the kinds of debts that can be addressed with help from Credit Canada. Debt consolidation involves combining one of more debt into one with a lower interest rate which makes paying debts down faster a lot easier. 

The conventional wisdom is to save for a house first then put money away for retirement. But housing is expensiveand prices continue to climb. As well cheap debt on housing will not go on forever. At some point interest rates are going to rise. For many, after paying household expenses there won’t be a lot of opportunity for significant investment in tax-free savings accounts, registered retirement savings plans, and other investment tools. We have multiple debts as Canadians when we need multiple savings plans. 

The simple truth is young adults and families are going to have to put more effort into monthly budgeting for increased personal savings if they are to put a roof over their heads and build nest eggs. This could involve major lifestyle changes. Close consideration of spending in relation to all of life’s non-essentials could be the name of the retirement savings’ game.

What’s the financial outlook for those beyond retirement age?

Generally these days there’s a lot of conversation about working beyond retirement. That’s not only because people are living so much longer than 65 and want to stay active, it also has to do with the very real need for an income that makes for decent retirement living. The facts show that many Canadians have not planned for a retirement income sufficient to meet even minimum lifestyle wants beyond 65.

What’s the big picture on creating security for retirement?

Retirement can be addressed in advance by working longer, investing more aggressively, lowering lifestyle expectations, and of course through saving. Every Canadian today must plan to implement some or all of these measures with the understanding that saving more is always the best option. It simply offers the most freedom for you to do as you please. If you have multiple debts Credit Canada can help with debt consolidation or a debt management plan. Its all part of our non profit credit counselling service for Canadians.


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