Mar 27, 2013

Why Do Home Insurance Premiums Change?

Your home insurance premiums can change over time for a number of different reasons. As with any other form of insurance, premiums can change as a result of fluctuations across the insurance market, which might relate to how a provider is fielding claims beyond just home policies. There may also be increases or decreases in your home insurance due to how a provider chooses to re-evaluate your local area, and whether or not you’ve made any changes to your policy that they deem to have adjusted your level of acceptable risk.

In terms of your location, if you’re in an area that’s, for example, recently had a lot of flooding, then insurance premiums for your home are likely to rise. Similarly, if there’s been a lot of property damage or claims from other people in your area, then an insurance company might view you as being vulnerable to theft or criminal damage. While these changes might be seen as unfair, providers will take these factors into consideration if they estimate a new level of risk.

The state of your property can similarly affect how much you pay on your premiums; any flooding or structural damage that requires repairs can damage your premiums, as can additions that you make to your policy that include more valuable possessions. If you’re putting an expensive laptop or exercise machine onto your contents insurance, then an insurer will view this as increasing the amount you could possibly lose and claim for in the future.

However, it’s important to remember that home insurance premiums can also go down quite considerably if you can prove that you’re taking the right precautions for your property - this can mean everything from getting a new security gate fitted, through to parking your car in a garage, rather than out on the street. Any investment in the safety of your property can ultimately work out well in the long run as s a positive step towards reducing the chance of a future claim.

Your home insurance premium may rise, though, if you decide to start working from home and running a business from there; new additions to a policy might include work computers, telephone equipment, and any sensitive documents that you want to keep in a safe. If you’re having clients visiting your home, then you’ll have to consider getting some form of public liability insurance to cover yourself if an accident happens while on your property.

There are several ways in which you can try to control changes in your home insurance premiums, or at least to keep them fairly level - shop around for specialist insurance, and avoid making small claims if you don’t have to. Use deductibles to make sure you can lower the amount you’d claim, and work on boosting your credit rating to make you a more reliable client for an insurance company. You might also want to combine your home insurance and your car insurance to get discounts, while also providing as much information as possible for every claim or change to your policy.

Author Bio : I’m Lisa jane, an ex-financial advisor, currently writing freelance for a number of online finance publications. Insurance is just one of my areas of expertise. For great value home insurance give Direct Asia a try.

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