A Guide to Home Insurance
With the increasing number of home insurance providers available
today, it is easy to feel overwhelmed by policy choices and varying
premiums. How can you know that you are getting the best cover that
your premium can buy? Typically, it is less expensive if you pay
your policy every year instead of paying monthly using direct debit.
Insurance companies often charge you extra if you pay every month
because there is always the chance that you will miss a payment.
With an annual premium, the provider is guaranteed to receive all of
their money up front.
How is the Premium Determined?
Your premium amount will depend on several factors including:
- Your postcode
- Your home: its current physical condition, the materials used to
build it and its age
- Whether you live in a neighbourhood watch area
- The value of your belongings
- Security features such as locks, alarms and security lighting
- The level of cover you require
- The risk of subsidence, storm damage, flood or fire including risk
factors like a thatched roof
Generally, the lower the risk of damage or loss to your home or its
contents, the lower your insurance premium will be. However,
different insurers may view different factors as more important than
others, which means that your premium amount will vary depending on
the insurance company you choose.
Can I Lower My Premium?
You will want to compare premiums from several insurers before
choosing a policy. By doing so, you are increasing your chance of
obtaining a competitive rate. Because each insurer will offer cover
at varying prices, you can use a home insurance comparison website
to view these companies side-by-side and make an informed decision.
You may be shocked at the difference in premiums between insurance
companies. Compare both the level of cover and the premium; it is
not worth buying a cheap policy if the cover is not adequate because
you will end up paying more later down the road if you need to make
Insurance companies view security features as extremely important
when considering premium rates. Typically, a provider will lower
your premium if you have any of the following security measures:
- A burglar alarm
- New door locks
- Approved locks on windows
- Joining a neighbourhood watch group
- Using time-switch lighting to activate the lights while you are
- Security-marking your valuables including your television or
Additionally, you may lower your premium if you have earned a no
claims discount. Specifically, if you have not filed a home
insurance claim within a certain time frame, usually five or more
years, you may be eligible to receive a discount of up to 30 percent
off your normal premium amount. On the other hand, some insurance
companies may give you the option to protect your no claims discount
for a slight increase in your premium. This means that if you have
to make a claim or two, your discount will still apply.
Copyright David Kane 2012