Why Your Home Insurance Policy Premium Rate Rises?

When you buy a new house or move to a new building, it is suggested to buy a home insurance policy along with it. A home insurance policy gives you financial protection against any uncertain loss to your house. But do you know your home insurance premium rises, even when you do not raise a claim? Let's find out the reason behind it!

Read more


Protect your house from calamities & valuable contents from thefts starting @ ₹125/month*

App & Website

24X7 Support

Compare Features

15+ Insurers

Dedicated Team

Easy Claims Process

**All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
*For 50 lakhs Structure Value

Protect your house from calamities & valuable contents from thefts starting @ ₹125/month*

Step 1/2
By clicking on "" you agree to our
Privacy Policy and Terms of Use
Get Updates on WhatsApp

Reasons Behind Your Home Insurance Premium Rate Rises

In India, several home insurance companies are offering you the policy according to your need. But to find the best home insurance company, you will have to do thorough research. You must check if the insurer provides coverage for comprehensive risks while calculating the premium or not. Also, check whether your insurer evaluates the risk associated and decides the premium when you raise a claim.

There are several reasons behind the rising home insurance premium that has nothing to do with how many times you have raised claims or the reasons that are not in your control when it comes to managing the rising premium rates.

Reasons That Are Not in Your Control

Some of the uncontrollable factors are as follows-

Sudden Rise in Labour or Constructing Material Cost

Your premium is decided upon how much it would cost to rebuild a house if there is a total loss. The construction and labour costs rely heavily on economic factors and market prices. As both the costs rise, they will reflect in your home insurance premium.

Effect of Natural Disasters

Any sudden change in environmental or local weather conditions can impact your premiums. Some unforeseen weather activities like forest fires, hail storms, or cyclones might hit your area. Thus, it increases the risk to your house and leads to a typical hike in home insurance premiums. All these natural disasters are one of the uncontrollable factors that cause a rise in premiums.

Home Aging

In case you are a loyal customer of your home insurance provider and pay your premiums timely, still, your insurer can inspect your home at the time of policy renewal. While conducting an inspection, they might find poor home structures that are more vulnerable to risk. Some of the common types of risk include breakdown due to fire, electrical systems, or plumbing. As a result, your insurer may increase your premiums.

Reasons That Are Under Your Control

When You Raise Claims Frequently

When you have a long and detailed history of filing claims against the minor damages to your house, your insurer will certainly quote you a higher premium to pay the next time. Contrarily, if you never raise claims for nominal damages, your insurer might quote you a lower rate the next time.

However, your premium rates are also decided by the area you are living in. If you reside in an invariably burglarized or disaster-prone area, it may increase your premiums.

When You Add Any Structure to the House

Swimming pools, rented areas, swing sets, garages, or trampolines are considered 'additional structures' in the insurance industry. In case you are building up any additional structure in your house, the coverage will also extend and thus, will increase the premium amount.

Ways to Lower Your Home Insurance Premium Rates

When you find your home insurance premium rates are rising, you can control them or lower them by following the below tips-

By Using Smart Home Technology-

Smart monitoring devices like fire alarms, smoke alarms, water leaking alerts, and safety locks should be used by you to ensure safety.

Choose a Higher Deductible

You must have heard this rule of choosing a higher deductible means paying lower insurance premiums. You must ask your insurer to explain your deductible options before deciding which policy to buy.

Ask for Discounts

You can ask for different discounts from your insurer. Multi-policy discounts, claim-free discounts, safety devices discounts, first-time homebuyer discounts, senior citizen discounts, and long-term policyholder discounts are some of the common types of discounts offered by the best home insurance companies.

Select Home Insurance Policy from Different Insurers

Rather than sticking to your existing insurance company, you must explore the other options too at the time of renewal. To get the deal from the best insurance company, you must check their policy benefits, inclusions, and exclusions. You can also check multiple plans offered by different insurers in your budget bracket.

Final Thoughts

Several controllable and uncontrollable factors decide whether insurers increase the insurance premiums or not. If it increases, how much it will be. However, you cannot change the effect of these factors. But you can take the steps to minimise its effect, which is mentioned in the article.

Written By: PolicyBazaar - Updated: 06 April 2022
top