What affects your home insurance premium?

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photo credit: wwiwsky

Home insurance premiums can vary quite significantly depending on your circumstances.  One of the first steps is to shop around for a policy and find the one that suits you best in terms of price and coverage.

When you are looking around for your policy sometimes it’s helpful to know how a home insurance premium is calculated.  It gives you a bit of insight into how you can get the cheapest policy by making a few changes to what you buy.

Some of the things that can affect the price of your house insurance are:

  • The type of home you live in, including the age of the property will have a large influence on the cost of your premium.  Some properties need specialist home insurance cover such as if it’s a thatched property.
  • If you opt to pay more excess  then you are likely to be able to pay less for your premium.  Your excess is the amount you have to pay up front in the event of you having to make a claim.
  • Just because a policy is cheap, doesn’t mean it’s the best cover to have.  A cheap policy might be missing certain extras that other policies have included in the premium price.  If it’s cheap, very often the extras need to be added on and will cost more.
  • Having a secure home generally means that you could pay less for your home insurance.  A secure property is seen as less of a risk by insurers.  Someone living in a secure home is less likely to make a claim for a burglary and theft of contents so insurers are able to charge them a lower premium.
  • Some areas are deemed more risky than others by insurers.  Insurers look at postcode areas to determine the risk of an area.  There are various factors that go into this such as the amount of crime an area has as well as environmental factors such as is the area at risk from flooding.
  • Unoccupied homes are not particularly easy to insure and can cause a home insurance premium to be higher than if there was someone living in the property regularly.  It’s a good idea to shop around for specialist premiums like this because specialist insurers might be able to do better deals than some of the main providers.

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