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Here are 7 Reasons behind High Home Insurance Quote

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Published on February 22, 2022. EST READ TIME: 3 minutes

Whenever you plan to buy a home insurance policy, you mostly check out the quotes from different insurers. Apart from the pricing, it is necessary to check out the coverage offered by the insurer for a particular plan. However, you can also get high quote for your home insurance policy due to numerous reasons, about which we will discuss in this blog.

7 Reasons behind High Home Insurance Quote

1. Renovation of house

Home insurers evaluate the house's premium according to its present condition like amenities, size and in simple words, the overall design of the house. If you make some changes in your house and install a few new things inside your house like a modular kitchen and a home theatre system, it will affect your home insurance premium for the next year. The premium of your home insurance policy will be evaluated after including the modular kitchen and a home theatre system hence increasing the premium rates of your home insurance policy.

2. Home insurance deductible

A deductible is a sum you pay for risk before the insurer pays the claim. So it depends on you that you choose the right deductible amount when purchasing the policy. It is like the lower the deductible, the less you save on premiums. For example, the premium amount of your existing policy is Rs. 30,000, and the deductible amount you agreed to pay is Rs. 5,000. So the insurer will pay you Rs. 25,000 at the time of claim after cutting out the deductible amount.

3. Disaster prone areas

If your home is in a disaster-prone or a Natural calamity-prone area, it will increase the home insurance premium, while homes in a low-risk area score lower premiums. It also depends if you live in a densely populated urban area. For example, if you live in a house located in the mountains that is prone to land sliding, then the house insurance premium will go high.

4. Inflation increases

In India, inflation is touching new heights every other year. Similarly, insurance companies increase their rates as inflation increases. It depends on the price range of home appliances; the insurance rates are adjusted. For measuring inflation, the insurance company references the index of consumer price to adjust its rates. This makes it one of the biggest reasons behind the increment in the insurance policy premiums even if nothing has been changed or renovated.

5. Credit history

If you are an old home insurance policyholder, then your credit score will impact the premium rates of the policy. The insurance company checks your credit score. Those people who have a bad credit history like check bounced have seemed like a financial risk by the insurance companies. Poor credit history can increase the premium of your home insurance plan.

6. Size, age & construction

The size of your home, age of your home, and how it was constructed are also factors that can impact your home insurance premiums. It is because if you live in a 30-year-old home with a poor structure and decide to rebuild it. Then the premium of your home insurance policy will be evaluated on these things.

7. Prone to crime locality

If you live in an area prone to theft and burglary, this will increase the premium of your home insurance policy. The insurer evaluates the crime rate in that area. They also check how much they have paid in the past for claims arising due to theft and burglary. The rate varies out based on your City, Colony or streets.

Conclusion

When you are purchasing a home insurance policy, then the above-mentioned factors will play an integral role in deciding the premium for your respective plan. You can opt for HDFC ERGO home insurance policy and enjoy discounts up to 45% on premium.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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