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There are a number of factors you should consider when purchasing any product or service, and insurance is no different. Below is a checklist of things you should consider when you purchase homeowners insurance.
First and foremost, purchase the amount and type of insurance that you need. Remember that if your policy limit is less than 80% of the replacement cost of your home, any loss payment from your insurance company will be subject to a coinsurance penalty.
Also, determine the amount of personal property insurance and personal coverage that you will need for your situation. Secondly, you need to determine which, if any, additional support you want to add to your policy. For example, do you want the personal property replacement cost support or the earthquake endorsement?
Finally, once you have decided on the coverage you want in your homeowners insurance policy, you should now decide which insurer you would like to purchase the insurance from. Some people like the idea of purchasing insurance from a mutual company rather than a stock company. You should also decide whether you would like an insurance agent to assist you in your purchasing decision or if you would like to buy the product directly from an insurer without the assistance of an agent.
The cost of home premiums can depend on a number of different factors, and how they apply to your personal circumstances; e.g. the security of the area in which you live, or how conscious you are of home security (i.e. if you have an approved burglar alarm installed). Shown below is a list of the main factors that affect cost of home insurance
The level of cover required by your policy – The value at which you wish to insure your property can make a significant difference to home premiums, as this determines the risk that is being taken on behalf of the insurer.
The area and size of your home – This is relevant to buildings policies, and is used to calculate the total rebuilding cost of your home. The larger this value, the larger your buildings premiums will be.
The physical nature of your property - A sturdy home built from bricks, concrete or stone (not wood), with a slate or tile roof will generally lead to lower home premiums. In particularly wet climes, the area of flat roof on your home will also determine the cost of your premiums; it should be as little as possible.
The area you live in - The crime rate of your area, and hence the likelihood of a burglary will determine the risk the insurers are taking on, and also your home premium costs. The likelihood of natural disasters is also taken into account; e.g. if your property is situated on a flood plain, the risk of a flood is obviously very high, and this is reflected in the cost of your premiums.
The level of security in your home – If you have an accepted security system installed, the insurers will take this into account, and may give you a discount if you qualify within their parameters.
The condition of your home – Namely, electrics, plumbing and heating systems will be evaluated to determine the risk of damage being caused to your home as a result of any of these. Home insurance reviews from Finance Reviews, offering you independant reviews of uk home insurance policies.
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