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Factors Affecting Home Insurance Premium

You invest your life savings in purchasing a home which makes it very important to protect it with a home insurance policy. You also make sure that the premium amount fits your budget and you get the best coverage however, certain factors might increase or decrease your home insurance premium. Read on to learn about them.

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Your Locality

The first thing that affects the home insurance premium amount is the location of your house. It is because the insurance company sends an inspection team to your house before selling you the insurance plan.

 If you live in an area that is prone to theft or natural calamities such as floods, storms, etc. then the insurance premium will most likely be higher. Conversely, if your house is in a gated society and there is a 24 hours security facility then the premium amount will be comparatively lower.

Safety Measures That You Take

When you build or purchase a house, in order to protect it, you take all kinds of safety measures such as installing CCTV cameras, water sprinklers, smoke detectors, etc. So when you opt for the home insurance policy, the insurer takes these safety measures into consideration and the premium amount comes out lower.

However, if you do not take this kind of safety measure then the premium of your home insurance policy would be higher. This is why it is recommended to the buyer to take personal safety measures so that the calculated premium amount stays as low as possible.

If You Raise Claim

The purpose of purchasing an insurance policy is to be able to raise claims when required and get the specified compensation for the loss or damage. However, this can affect your insurance premium for the consecutive year and increase it. This happens as it leads your insurance company to believe the fact that you will most likely raise another claim in the future.

Natural Calamity Prone Area

Houses and apartments build near a river, ocean, or hill stations are usually prone to natural calamity. Let’s take Mumbai for example, it is almost every year when we get to hear the news related to heavy rainfall in Mumbai city as the streets get flooded causing damage to the houses.

This becomes one of the biggest reasons behind the high premium amount of your home insurance plan. However, you cannot control the natural calamity but if you wish to protect your house from severe damages then protecting it with home insurance is vital.

Deductible Amount

A deductible is an amount that you pay out of pocket when you raise a claim. This amount is decided at the time of purchasing the policy. This amount is decided by the Insurance Regulatory and Development Authority of India (IRDAI). However, you can choose a higher deductible amount that will eventually decrease the premium amount of your insurance policy.

It is recommended to keep the long-term investment in mind while choosing the deductible amount. As you might not want to pay the higher deductible amount due to other expenses as it might cross your budget in the future.

Cost of Construction

When you build a home, you use the best material to build it. However, if you do not plan to live in that particular house then the kind of material you use might not be that good. However, the cost of construction determines the insurance premium amount.

If you use the best material to build the house then the insurance premium would be lower and if you use bad quality material then the insurance premium amount would be higher. This is how the cost of construction plays the role in determining insurance premium amounts.

Riders You Choose To Purchase

Along with a home insurance policy the insurance companies also sell riders (Add-on) in case you want to enhance your home insurance coverage. It is not compulsory for the buyer to purchase the add-ons provided by the insurer.

However, if you choose to purchase different add-ons such as loss of rent cover, lock and key replacement, etc. to enhance the coverage of your home insurance then you will have to pay an extra amount that increases the premium amount of your policy.


These were some of the factors that would affect the insurance premium amount of your home insurance policy. Since it is easier to purchase the insurance policy now, you can design it as per your requirement by learning about the policy in detail online and not just this, you can also compare different plans and calculate the premium amount using the premium calculator tool online to check whether the premium amount fits your budget or not.




Written By: PolicyBazaar - Updated: 11 March 2022
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
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Reviews & Ratings

4.4 / 5 (Based on 120 Reviews)
(Showing Newest 10 reviews)
Bokaro, July 26, 2022
Coverage for natural calamity
I was looking for an insurance policy that provides me coverage for natural calamity. Since my house is located near a river and it floods my area in the rainy season. So i went on the Policybazaar website and particularly look for this coverage found the exact plan that provides this coverage.
Bilaspur, July 26, 2022
Premium Calculation
I was looking for a home insurance policy online. I stumblled upon the Policybazaar website and it is one of the best online platforms to purchase home insurance policy. I learned about the insurance plan i wanted to purchase and after choosing the plan and add ons i could calculate the premium using their online premium calculator. Thanks Policybazaar.
Bikaner, July 26, 2022
Natural Calamity cover
I have recently purchased a flat and wanted to cover it with a home insurance policy. I was aware of the Policybazaar website so i thought i should give it a try. I went on their website and as i wanted to cover my flat with a natural calamity cover specifically i searched for it and without wasting a minute it showed me the natural calamity coverage.
Amritsar, July 26, 2022
Enough coverage
I was looking for a home insurance plan online. I was fed up as i have to visit different websites to look for a single suitable insurance plan. However, i stumbbled upon Policybazaar website where i was able to find the right insurance plan that could provide me enough coverage.
Bareilly, July 26, 2022
Nice customer service
I wanted to purchase a home insurance policy and a friend of mine suggested to purchase it from Policybazaar. I bought the policy and after that i had a confusion regarding exclusions so i called up Policybazaar customer care and they cleared out the confusion and i loved their customer service.
Ajmer, July 26, 2022
Qiuck claim
I purchased a home insurance policy recently. However, due to a natural calamity, my house was damaged as the pressure of the water because of flood broke the enterance door of my house. But the insurance plan that i bought got me covered and i as able to get the quickest claim possible.
Delhi, July 26, 2022
Natural calamities covered
I bought a home insurance policy recently. As i live near a river and in the rainy season, my area gets flooded so in order to protect my house and its contents, i purchased the insurance to get coverage for such natual calamities and i am tension free now.
Kolkata, July 26, 2022
Wide coverage
The home insurance plan that i purchased from policybazaar's website is a great plan that provides me coverage for not only the structure but also cover several expensive content of the home such as paintings, mobile phones, laptops, television, etc.
Ahmedabad, July 26, 2022
Suitable insurance plan
I purchased the group health insurance policy from Policybazaar website. First of all, i did not have to wander much online while lookig for a home insurance plan that fits my requirement and i found the suitbale home insurance plan by comparing different plans on the website.
Amritsar, June 09, 2022
Natural calamities covered
I bought a home insurance policy recently. As i live near a river and in the rainy season, my area gets flooded so in order to protect my house and its contents, i purchased the insurance to get coverage for such natual calamities and i am tension-free now.
  • Disclaimers+

    #Savings of 28% are based on the comparison between the highest and lowest premiums for a pucca building with sum insured of >₹ 1 crore at Delhi, for property age less than 5 years and policy term of 11 years.