When you finally get your home ready and start living in it, you get a home insurance in order to protect it from any mishappening. The factors that you consider before buying that home and those factors play a vital role in the premium of the home insurance policy you purchase. So, why is it that Home insurance premium increases every year? Let us tell you.
Reason behind Increment in Home Insurance Premium
This might come as a shock to you but it is not for the first time but Home insurance premium increases every year. The factors responsible for the increment in the premium of your existing home insurance policy are as follows.
Increased Value of Property
It is a well-known fact that when you buy a home, the value of that property increases every year. The increment in the value of the home depends of the added investment you made. It can be related to the beautification of your home or installing something new like modular kitchen for example. This increases the value of your home in the market and with these upgrades the premium of your home insurance increases.
Local Crime Rate
When the insurer calculates your premium, they look at the crime rate in your locality and how likely you’ll become a victim of theft and vandalism. If the crime rate in your locality has increased over the past few years then your insurance provider will increase the premium of your existing home insurance plan.
Increment in Inflation
The inflation increases when your insurance provider increases their rates. This happens because the value of the content of your home will cost more than last year. The insurance industry adjusts the rates according to the index of consumer price for measuring inflation. It becomes one of the biggest reasons in the increment of the premium of home insurance.
Now that you are aware of the reason behind the increment in the premiums of home insurance, let us tell you about the ways that can help you keep your premiums as low as possible.
Tips to keep Home Insurance Premiums as low as Possible
As we have told you about the reasons behind the increment in the home insurance premiums and once you become the policy holder you’ll have to deal with the inflation in the premiums every year. Here are some tips to keep your premiums as low as possible.
Keep a Good Credit Score
Keeping a good credit score helps with everything. It is taken into consideration by almost every insurer now-a-days to check the buyer credit history. If you’re credit history is smooth it will most likely keep your home insurance premium low. In order to keep your credit score healthy try to keep your credit balance as low as possible, keep a track, make sure of timely payments etc.
Thorough Research
Buying a home insurance plan can be a hectic task sometimes, but there are hundreds of insurance providers who off offer luring options. You should just sit on your computer with internet access and get to know all the details related to the policy and there are such user friendly websites which even lets you compare among different plans at one place and make the job pretty easy. Since it becomes this easy you should do a thorough research and then choose the plan best suited to your requirements.
Better Security is a Plus
The level of security you keep in your home reduces the premium rates. CCTV cameras, smoke detectors, sprinkler system, anti-theft alarming system etc. keep your home secured and helps in reducing the premium. However all these security systems won’t get you a discount on the premium hence it is advised to you to check for the devices that can earn you a discount and understand how much can your home insurance plan save you.
Beneficial for Old & Loyal Customer
Being loyal towards someone or something always pay, if you’ve been a loyal customer to your existing home insurance company then you’re most likely to save in your premiums. Let’s just say that you’ve been a policy holder of one company for 3-5 years and as those companies provide discounts and offers for the old and loyal customers every other year, then you can have the benefits coming with those discounts and offers and they might help you keep your premium rates as low as possible.
Conclusion being!
Since purchasing a policy is the first step so it is advised that you should prefer buying your home insurance policy online after doing thorough research and check for the discounts available. Inflation is the basic reason behind the increment in the premium rates of home insurance policies so it would be a better idea if you buy a home insurance policy as soon as possible. Sooner the better.
