Home Insurance Rates

It is a well accepted fact that home insurance rates are determined not just on the basis of conventional risk factors but to a large extent on how the home is maintained and protected. Most home insurance companies assess the insurability of a particular risk from various perspectives that depend on the approach of the insured. The consumer would do well to consider the kind of cover a cheap home insurance would provide before purchasing the policy.

Generally home insurance plans provide cover to the building structure including the walls, fences, and fixed glass and windows in the home and sanitary ware, etc. Home insurance covers the home against any damage and destruction due to fire, flood, earthquake, hurricane or man made disasters such as riots, theft, malicious acts and vandalism. Home insurance cover can also include the contents of a home such as furniture and movable fixtures.

It is true that home insurance rates are influenced by a number of factors that aren’t in the policy holder’s control such as location which may include its crime history, geography (proximity to volcanoes or flood prone rivers), etc. However there are factors influencing home insurance rates that are fundamentally within the control of the policy holder such as:
Home improvement initiatives – Certain home improvement measures like installation of a burglar alarm or a fire fighting system could result in substantial discounts for the consumer.

NCD (No Claims Discount) – When a customer has a claim-free track record for a certain length of time he is entitled to a discount that could reduce his premium by half or even more. NCD is well established in automobile insurance with its high claim rates and it is in the process of being established in the home insurance sector although the discounts may not be as high as they are in the automobile insurance.

Excess or Deductibles – When the policy holder agrees to a plan whereby he is liable to pay a certain amount of money in the event of a claim the premium could be substantially low. This is called ‘Excess’ in the UK and ‘Deductible’ in the US.

Home insurance rates are generally flexible and are customized for different consumer groups in terms of their income, purchasing ability, risk and certain other factors like location, home improvement measures etc. Yet it is necessary for a customer to know how much of his risk is covered and in what way by enquiring extensively about the plan he is buying and reading the policy booklet carefully after purchasing the policy.