What Factors Affect My Home Insurance Premium?
Caeva O'Callaghan | August 15th, 2023
When it comes to home insurance, it’s often difficult to work out how they arrive at a final price. How much you pay for your premium can be affected by a number of things. From your address to your claims history, and even your lifestyle, it will all play a role in calculating your quote.
Read on to discover answers to these questions:
- How does my insurance provider calculate my premium?
- Why am I paying so much for home insurance?
- What can I do to lower the cost of home insurance?
When it comes to the mathematical alchemy performed by insurance actuaries, it’s all based on one thing: risk. The factors that affect your home insurance premium are all predictors of risk, which tell your insurance company how likely you are to make a claim.
Your eircode – and sometimes, your house number – is one of the most crucial factors in your home insurance premium.
In Ireland, some streets are vulnerable to flooding. Others have large tree roots, which can cause subsidence.
And it’s not just environmental factors. Your area may be experiencing a surge in crime. In particular, car theft and burglary rates will affect your home insurance premium. Lower-income areas with high crime rates may pay more for home insurance.
However, this means it can swing either way. If you live in an affluent area, your posh eircode may be pushing up your premium. This is because insurance companies will assume you have more valuables, and may be a higher risk for burglaries.
Now we’re getting personal. Your lifestyle will affect your insurance in a number of ways. For instance, have you got kids? They’re more likely to cause damage to your buildings and contents. You’ll need accidental damage cover, which normally costs extra, to cover any mishaps.
If you’re a smoker, you’re statistically more likely to cause a fire. Even your age will affect your insurance. If you’re over 50, insurers will often offer you a discount. This is because you’re more likely to be retired, not have young kids in your home on a regular basis, and potentially at home during the day. Whereas if you’re younger, and likely to be working, your house will be unoccupied for longer periods.
The value of your belongings
Maybe you don’t live in a very posh house, but that doesn’t mean you don’t enjoy collecting first edition comic books or rare aged whiskey.
The more valuable the items you own, the more likely you’re going to want to be able to replace them if they’re damaged or stolen. This means you’ll have to pay more.
Even if your collection isn’t particularly valuable, but there’s a lot of it – you have 10,000 teapots, for example – this will affect your cover. In this case, it’s best to get an insurance broker to find the cover you need.
Do you have a thatched roof? Log cabin? Shipping container micro-home? Is it a listed building? You may need specialist buildings cover, which might not be easy to find on the high street.
Your premium will likely be affected if your structure is unusual, or very old. For example, if your home is built of wood, the risk of fire damage is greater. If you live in a unique structure, it’s less likely that any tradesman will be able to make repairs. Not only is your property likely more vulnerable to problems, it will take time and money to find the specialists needed to restore it.
Most importantly, an insurance broker will be able to find you the perfect cover to fit your needs.
If you’ve made one or two previous claims, that’s normally okay. In short, that’s what insurance is made for.
But if you’ve got a claims history longer than your arm which reads like a catalogue of catastrophes, insurers will be suspicious. Rightly or wrongly, they’ll see you as a disaster magnet, and be very wary of insuring you.
However, if you haven’t made any recent claims, you’ll often be rewarded with a no claims discount. You should never make a claim unless it’s in your best interest to do so.
Want to lower your premiums? The easiest way to do this is to increase your security. Have a certified burglar alarm installed by professionals, fit high-quality locks, and repair that wonky garage door, for instance.
Double glazing, fire alarms and smoke detectors can all affect your premium. If you’re having trouble finding insurance after a break-in or house fire, increasing your security measures may appease providers.
Size of property
Rebuilding a large property is, obviously, more expensive than a smaller one. Large houses are more likely to be very old, or very posh, and as a result this pushes up the cost of restoration even more.
Not only that, the larger your property, the more valuables you probably have within it. People tend to fill whatever space is available. This could be with furniture, antique collections, or just bits and pieces. In other words, no matter what you keep in your larger house, the more it will cost to insure.
Talk to us in QuoteMe.ie with any of your home insurance queries.
One of the main benefits of using a home insurance broker is that we are independent and can compare the market for you. If you are unsure about what is included and not included in your home insurance, pick up the phone and call us. We provide immediate professional advice from certified and trained insurance agents. Please, never hesitate to call on 0818 224433 or 042 9359051.
You can also get an immediate home insurance quote online with us. We compare home insurance in the Irish market from 12 insurers to get you the right cover for your individual circumstances. We look forward to hearing from you soon.