Are Home Insurance Premiums Decreasing?
Caeva O'Callaghan | December 13th, 2021
You may have noticed insurance prices have been fluctuating lately – but is there a chance home insurance premiums could go down?
At best, we expect the cost of home insurance to remain the same in 2022. However, we will not be surprised if the cost of home insurance increases.
The state of the insurance industry has been affected by many factors, including COVID-19 and the rise of working at home.
In this article, we’ll go over the following questions:
- Why could home insurance go up in 2022?
- How does the weather affect home insurance?
- How can I reduce my home insurance premiums?
You may well find that your home insurance premiums go up in 2022. To find out why, and what you can do about it, read on.
Why could home insurance go up in 2022?
Insurance premiums may rise next year, and this is due to a number of things which have affected the insurance industry in recent months.
For one thing, here at QuoteMe.ie we have been hearing from insurance companies – as well as noticing it ourselves – that the frequency of claims is increasing.
This happens every so often, and normally there’s no special reasoning behind it: it just happens sometimes, but prices have to go up accordingly.
This year, however, there’s a definite reason behind the rise in home insurance claims: COVID-19.
With the pandemic came nationwide lockdowns and more people working from home. This means our houses are getting considerably more use. Prior to March 2020, your typical house went unoccupied for 12 hours per day.
Now, however, our kitchens, bathrooms, heating, fixtures and amenities are being used so much more. This leads to increased wear and tear, and of course increased risk. That’s why home insurance premiums have risen lately, and we’re foreseeing similar numbers in 2022 and beyond as fewer people go back to the office as expected.
How does the weather affect home insurance?
Another influencing factor on home insurance premiums is the weather. There have been no major winter weather events for the past few years. But if there is just one major storm, flood or freeze, the frequency of expensive claims will increase which puts further pressure on home insurance premiums.
As we haven’t had a major storm for a while now, it’s only a matter of time until it happens again, especially with climate change. When premiums are already at a high due to increased activity within the home, it could lead to a larger bump in premium prices than expected.
Buildings insurance policies will usually cover financial loss caused by storm damage. Insurers generally say storms would involve violent winds, usually accompanied by rain, hail or snow. However, in some cases, you may have hail or snowfall without winds, or strong winds that cause damage all by themselves.
If an insurer rejects a claim, it could be because of a dispute over what actually constitutes a ‘storm’, or whether the damage was actually caused by a storm. This is why it’s important to do everything you can to protect your home, and not rely on your insurance too much. But if your insurer thinks you haven’t taken proper precautions, your claim may be denied.
Insurers look at data from the Met Office and other sources to determine if a storm indeed happened when you say so, and if it was strong enough to inflict the damage wrought. If a storm happened ‘some time in the past’, that isn’t persuasive.
How can I reduce my home insurance premiums?
Making your home more secure, shopping around for quotes, and increasing your excess are all effective ways to lower your home insurance premiums.
Insurance companies want to know you’re keeping your home safe and sound. Smoke alarms are easy to install yourself, and you can get hard-wired or battery operated models.
A DIY alarm system such as Nest or Hive is a good idea to install for your own safety, but unfortunately, no insurance company will lower your premium for this type of alarm. If you want to invest, a wired burglar alarm is a good way to lower your insurance premium.
Also, if you store a lot of cash, antiques, jewellery or other pricey knick-knacks around your home, you may want to think twice. In order to get contents cover you must tell your insurer about anything valuable on the premises. So, if you have more valuables on site, the more you’ll pay. Store valuables in an off-site secure facility, such as a safety deposit box at a bank.
Finally, shopping around for a good insurance quote is worth doing, but switching insurance, comparing quotes and making phone calls is a lot of hassle. Who wants to devote their lunch break to finding home insurance?
That’s where your broker comes in. Let them know what you’re looking for, and they can compare quotes for you. With their insider knowledge, they’ll be able to sniff out deals from lesser-known names, who might be able to provide your perfect cover.