Whether you are a landlord or a home owner, having home insurance as well as contents insurance can protect you financially from situations such as fire, theft and weather damage which could leave you out of pocket. However, there are factors which every home insurance company will look for to make sure that they are making the right business move. Here are some risk factors which may affect your home insurance premium.
One of the first things that an insurer will look at will be your postcode. A postcode check is a simple way of determining factors such as social issues in the area, the size of your home and how expensive your home is. If you live in a socially deprived area where events such as theft are more likely to place, this will affect your premium. Other location factors include an outdoor swimming pool, being too far away from a fire station and even trampolines.
If your home is situated in a high-risk area such as a floodplain which is at risk of reoccurring floods, this will also alter your insurance. At least 5 million people in the UK live in a flood-risk area which is likely to rise over the coming years due to global warming. House prices can decrease by around 15% in these areas. Mortgage lenders also demand that you have buildings insurance before they offer a mortgage deal, therefore, many houses are simply too risky and impractical to buy. However, around 100,000 buildings were saved in the UK thanks to advances in technology which can accurately categorise them into low, medium and high risk properties whilst still being in a flood-prone area. Lenders may also look at risks of subsidence due to poor soil quality and other factors which are more prevalent abroad such as earthquakes and wildfires. However, in places such as California which is hit with reoccurring earthquakes, insurers are required to offer earthquake coverage. However, to subsidise their own risks, many charge additional fees and strict guidelines must be adhered to. If you are a landlord, head to Rentify for free advice on how to maintain your property over the year.
Dogs are a surprising factor which can affect home insurance, particularly if you own an aggressive breed. In 2011, more than a third of all homeowner’s liability claims in America were paid out because of dog bites. This accounted for nearly $479 million. Because a dog can maim, injure or even kill a person in their own home, insurers have devised a list of breeds which they will not insure, including pit bulls and Dobermans.
Newer homes generally have lower insurance rates because the structure and components of the house will be in better shape. Insurers will consider plumbing, wiring and heating systems when they evaluate a property as these could lead to fires and water damage if they are not maintained or replaced.