How You Can Affect Your Home Insurance Premium
There are several ways that you can manage your own risk to help keep your home insurance premium as low as possible.
A good claims history is critical. Typically, those who have made a recent claim are more likely to claim again. Insurers therefore consider past claim experience to be significant. Having no previous claims is best for your premium, but bear in mind the number and value of claims has an impact, so consider not claiming for very small claims.
Your Policy Excess
Another way to affect your number of claims is your policy excess. This is the initial amount of the claim that you, as the policyholder, pay. Your insurer pays the rest. When starting a policy, insurers will often provide the option to take a higher excess (meaning you pay a bit more when claiming) in return for a reduced premium. After all, an excess is effectively a form of self-insuring. Choosing this option also means you don’t have to claim for smaller claims (because you would be covering the cost), therefore reducing the increase to your premium when you do claim.
When purchasing a new home, you should consider the location, year built, and construction of the property as these will affect your premium. The reinstatement value of your property (your buildings sum insured) and the replacement cost of your contents (your contents sum insured) will also be factored in.
It’s common for insurers to offer a premium discount if you have window locks and burglar alarms that are in operation when the property is unattended. However, there are normally conditions attached, such as a theft claim will not be paid if the locks or alarm were not in operation at the time of the break in. When getting a quote, make sure to ask about conditions that apply. Having working smoke alarms can also help to reduce premiums.
There have been great developments in ‘smart home’ technology in recent years, with more affordable solutions are coming to market. This technology can help you prevent or reduce property loss and damage. For example, there are leak detectors, tags to find lost property, and alerts to your mobile when there is smoke or a fire. These products can help to prevent issues arising, which helps keep your home safe and damage free, as well as prevents claims, which keeps your premium in check.
Insurance is there to provide a financial safety net when needed . There are things we can all do to reduce the chances of suffering a loss or damage resulting in a claim. By proactively managing risks at home we are likely to benefit from lower insurance premiums.
This guidance is for general information purposes only. Allianz accepts no responsibility or liability for any losses that may arise from any reliance upon the information contained in this guidance.
About the author:Business owner, consultant, and expert witness. Former motor and property insurance underwriter.
Date:March 11th, 2019