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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!

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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
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
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Bikaner, July 26, 2022
Natural Calamity cover
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Amritsar, July 26, 2022
Enough coverage
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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.