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What are the Factors affecting the cost of
home insurance?
The cost of the premiums on your UK home insurance
is affected by many factors. Ultimately, the cost of the policy
will depend on how these factors are applied to your particular
circumstances. Should you live in a secure area, which is of low
risk to the insurer, you are likely to have a cheaper home insurance
policy than someone living in a more risky area. However, there
are other issues at play here, and your premium will not be calculated
until they are taken into account.
Firstly, like most insurance
policies, you need to specify the level of cover you require. How
much do you want to insure your property for? This amount will make
quite a large difference to the size of your premiums, as this quantifies
the insurer’s risk.
The next item affecting your premium is the area and size of your
home plus all additional structures to be covered. This, when multiplied
by the rebuilding costs per square foot in the area in which the
property is situated, will tell the insurer the rebuilding costs
of your property.
Your home should be made out of bricks, concrete or stone and the
roof out of slate, tile or concrete, with the smallest amount possible
of flat roof area. If any of these are not regular, then your premiums
will rise.
The area you live in will contribute certain factors to the cost
of your home insurance.
Obviously, the crime rate of your area will determine the risk the
insurers are taking on. But also there is the likelihood of natural
disasters. Is there a likelihood of a flood in the area, or is the
area prone to subsidence or slippage. If there is, the insurance
company’s risk goes up, and so do your costs.
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Another factor will be how near your home is to the emergency services,
such as fire stations, for obvious reasons. It will also help if
you are a member of a neighbourhood watch scheme.
As for your property, the level of security of your house is a
factor, along with the condition of the plumbing, heating and electrics.
Your age is taken into account, with customers over 50 benefiting
from discounts. Also, you can decrease your premiums by paying a
higher excess, but increase it should you choose optional extras
on your policies, or choose extended cover.
Ultimately, you can take certain measures in order to cheapen your
home insurance.
Most involve thinking logically and using your head. Any time you
take a measure to make you a candidate with lower risk, tell your
insurance
company. You could get a discount, there is never any harm in asking!
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