Sadly the cost of any insurance policy, including home cover, is far from constant. Whilst the prevailing trend for any policy holder should be for steady decreases over the years, that's not always the case.
So what can change in 12 months?
Well, let's assume for a moment that you haven't made a claim in the last year and that your policy is remaining the same, including your level of contents cover. There are a number of external factors that insurers take into account or factors that may have altered since your last quote.
For instance, if there has been a spate of burglaries in your area over the preceding years, this may have a negative impact on the risk level of your neighbourhood. Of course this has little or nothing to do with anything that you've done directly, but insurers have to accurately assess the liability that they face and all potential issues relating to cover.
You may also find that your security system has been downgraded by the time you come around to renew. Again, this is just something that home insurance companies occasionally do, particularly as newer, more advanced alternatives flood the market. As unlikely as it may be, this could also have an impact on the amount you pay, particularly if the crime rate has increased in your vicinity.
Then of course there are natural disasters. This is completely out of your control, but if there has been flooding in your post code or surrounding area, this may put your premiums up. It's unfortunate, but sadly it can have a knock-on effect.
But let's return to the question in hand, how much should you actually budget for your home insurance? Well, you shouldn't immediately assume that it will be lower than your previous year's policy. Whilst there are no claims bonuses on offer, those other factors that I've mentioned previously can negate any such reduction. But your current policy price is certainly a good benchmark for budgeting purposes.
Don't forget that once your insurance is up for renewal that you can look around. So if you have carried out some remedial research and seen a better price elsewhere, you could always contact your current insurer about this and see if they can match the price or offer a better level of cover to compensate. Alternatively, you could just choose to take up the offer of the rival company and transfer your policy over.
You also need to bear in mind any increases in tax that may occur. For instance last year Insurance Premium Tax (IPT) increased to 6% from 5% - the first such increase in 11 years for UK consumers. VAT also saw a hike from 17.5% to 20%, which again may affect how much you pay for your policy. These kinds of alterations are completely out of your hands but can certainly have an impact, therefore it is always worth monitoring them - particularly if you're stringently budgeting for the year ahead.
To calculate your future home insurance costs is difficult to impossible. Insurance companies can rise or lower the price of policies simply based on the statistical data that they have available to them. But use your current quote as a base rate and go from there. It may not be perfect, but it's certainly the most accurate starting point.
Vincent Rogers is a freelance writer who writes for a number of UK businesses. For the best priced home insurance, he recommends Dial Direct.
Article Source: http://EzineArticles.com/?expert=Vincent_Rogers
Article Source: http://EzineArticles.com/6927719
No comments:
Post a Comment