23rd May 2016

4 Things That Can Affect Your Home Insurance Premium

Home insurance policies are complicated things at the best of times.


You might look at the premium you’re asked to pay and wonder: “How did they arrive at that figure?”

When calculating your premium, insurers take a lot into consideration. This is just a small list of the sort of things that will be taken into account when devising the figure.

Some of these things are obvious. Others…less so.

1. The Geographical Location of Your House

As last winter’s catastrophic floods made clear, some homes are at a higher risk of natural disaster than others.

So it should come as no surprise that homes located on flood plains generally pay higher insurance premiums.

Take a look at this UK flood map from the Environment Agency to find out whether your home is at risk. You can zoom in to see how high the risk is on your street.

2. Fracking

But everyone knows that a high risk of flooding can result in a higher insurance premium. Fewer people seem to understand the relationships between home insurance and fracking.

Fracking – or hydraulic fracturing – involves blasting wells with water and chemicals to extract shale gas for use in energy production. There are fears that the practice could contribute to ground subsidence, that it could encourage earthquakes, and that the chemicals used in the process could affect local water supplies.

Most home insurance policies already cover for ground movement that’s beyond your control. So in theory, you may already be covered for the harmful effects of fracking.

But this is very much a grey area. The long term effects of fracking in the UK are still unknown. It seems that many insurers are still waiting to see how things pan out before they make their stance on fracking clear.

If you’re worried about how fracking might be influencing your home insurance premium, we suggest you give your insurers a call and request an explanation.

3. The Presence of a Safe

In the wake of the global financial crisis, many homeowners decided to withdraw large chunks of their savings and lock their hard-earned money in a secure home safe.

It seems that insurers don’t like this idea. Most home contents insurance providers advise against storing large amounts of money in the home. Though home insurance policies do account for cash, they’re mainly concerned with “loose change” as opposed to stacks of bills, or to amounts of up to £500.

So if you insist upon storing a nest egg in a safe at home, your policy will likely have to be altered to account for your decision. And it’s fair to assume that the more money you have secured away, the higher the premium you’ll be expected to pay.

4. How You Use Your Home

Some people aren’t content to merely live in their homes. And the specific way you use your home can directly influence your home insurance premium.

For example, if you work from home, there’s a range of factors you’ll have to take into consideration. Unless you want to invalidate your home contents policy, you’ll have to tell your insurer that you’re working remotely.

And depending on the nature of your remote work, you might have to consider a few add-ons to your home insurance policy. If you regularly invite clients into your home, you may need to add public liability insurance. And if you employ an assistant, you may need employer’s liability insurance.

Also, many homeowners are now turning to services such as Airbnb to make a bit of cash on the side. It should go without saying that regularly welcoming members of the public into your home will affect your insurance premium. Some insurers have even started offering bespoke content risk policies for homeowners that use Airbnb.

If you need a bit of help understanding your home insurance premium, or if you’re about to make a claim and you need the invaluable assistance of a loss assessor, feel free to get in touch.

Call our 24/7 helpline on 0844 544 1699.

Call our 24/7 helpline on 0330 022 9179 for a free no obligations assessment

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