How your Home Insurance premium is calculated
Insurance companies determine Home Insurance premiums according to certain statistics. These statistics include the location of your house and your postal code. Low risk areas with fewer break-ins pay lower premiums than high risk areas.
Your claims history may influence your premium as well. If you have submitted fewer claims, your premium will be lower. When you claim regularly, you are viewed as a high risk and your home insurance premiums will reflect that fact.
Home Insurance: Buildings
Your Buildings Insurance Premiums are usually based on the following:
The size of your house
Home Insurance premiums will be higher for larger houses, because the cost of rebuilding is higher. Should your home be damaged, more repairs will be needed if compared to a smaller house.
The type of construction of your house
Brick houses pose lower risks than wooden houses and insurance companies generally provide lower insurance premiums for brick houses. The possibility of fire damage to wooden houses is greater and therefore increase the risk. The same applies to flooding, where the damage to wooden houses will be greater than to brick houses.
Type of roof
Tiled and sink roofs are lower risks than thatched roofs. Insurance premiums for houses with thatched roofs are therefore higher than tiled or sink roofs.
Security alarms and fencing
If you have a house alarm, adequate fencing, security gates and window barrier bars, your home insurance premium will be lower.
Home Insurance: Home Contents
The value of your home contents
Home contents with a higher value will lead to a higher premium and is generally covered against theft, loss and damage.
Home Insurance: Portable Possessions
Portable Possessions are the items you take with you from time to time and include your laptop, cellphone, glasses, handbag or briefcase, camera, clothing and jewellery. Items with a higher value can be specified and your cover will be adapted accordingly.
Keep in mind that your home insurance should reflect the cost of rebuilding your home, as well as replacing your home contents at current value. If your Home Insurance policy is not reviewed regularly, you may be under-insured.