Factors that affect the cost of your home insurance

Home insurance cost can go up and down depending on different factors including the ones listed here.

12:48 25 November 2012

Home insurance is typically one of the things that homeowners need to pay every year. Although it’s an added cost on the budget, it’s something that can protect homeowners from unforeseen incidents like flooding or burglary.

 

If you’re trying to figure out the amount of money that you should set aside for your next year’s home insurance, it’s best to use your current quote as a base rate. Remember, the cost can go up or down depending on some circumstances that maybe out of your hands.

For example, if there is a recent burglary incident in your neighborhood, the insurance company will most likely to increase your premium as they’ll feel that there is an increased likelihood that this may happen to your house as well. Or if there’s flooding in your area, you can expect the same reaction from the insurance company.

Another thing that you need to consider when calculating your home insurance is tax and VAT. For instance, IPT or Insurance Premium Tax increased from 5%-6% this year. VAT also increased to 20% from 17.5%.

However, there are ways to lower your home insurance. Upgrading your home security system will surely help. Also, don’t forget to shop around and compare instead of automatically renewing your home insurance with the same company to get the best rate available in the market.