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Contents Insurance and Home Insurances / Avoid premiums increase. What can be done? Save money and time by being informed. You would like to save money by comparisons?

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It has been found that buildings insurance of insurances are increasing on average by 1 - 2.5 % in Europe each year. In Great Britain it is for example just over £ 205. It the comparable with contents insurance, an increase of this type of insurance between 1 and 3% each year. But within some of these mainstream insurers the increases of the price has been even more drastic (example:  Norwich Union customers experiencing a premium increase of up to 6%). And there is the not answered question for everybody why is this happening? Naturally premiums are going to increase insurance rates more or less with inflation, but with all the competition out there, why are premiums going much more up and not down or stay where they are? To give more information on this theme , to understand the situation and to find a cheaper insurance the recent situation must be studied more in detail. Here are the different influencing factors:

1. Recent cost of repairing and rebuilding houses: Building and labor materials increase each year, and therefore it in the same way influences the costs to the insurer when the people make a insurance claim for their buildings. This cost inflation affects the insurance companies' naturally own operating costs as the insurers have to pay the higher bills and more wages, and so on. Sometimes the increase of the price index for labor materials is much higher than the general inflation. It can be expected that the  insurers will add on a little more to cover these costs for materials.

2. There is the British weather: It is a fact that also in Britain and whole Europe storms and especially floods, have been increasing in frequency a lot. According to the whole association of British insurers the damages of big floods in the last time causes huge waves at the insurers, with an average insurance claim of anywhere between this high amounts: £14,000 and £29,000. In the last two years there takes place some extremely destructive floods that have affected whole communities in Britain. An example is  Boscastle in Cornwall, or Carlisle, and also Helmsley in North Yorkshire. Millions of pounds was the sum of these catastrophic regional floods to be paid by the  insurance industry in Britain. 

3. Also do not forget the burglary: The burglary claims have in average increased in the value. The value is now in average at around £1,450. There exist two main reasons for this increase. The first reason is that many people have houses full of the newest electronic technology (from Ipods to laptops, computers, Playstation 2s and digital cameras and so on). These technical special things are all expensive items and as far as the burglar is concerned, have a big value if it will be sold. Burglars can choose the most expensive things and normally do it. The second is that Burglars often for houses with target well-off neighborhoods  – with expensive items like jewels in the house. By this reasons the  value of the claim shoots up each year more and more.

With the wisdom of this information, the insurers base their quotations on other claims. The insurances choose quotations that have been made in the postcode area in the past. That shows more justice.  For the case a particular problem with flooding or subsidence has occurred within a special postcode area has been found, then you will pay a really loaded premium for your insurance. It is the same  if a lot of your neighbors have suffered special break-ins. In this case you will suffer a higher premium because as far as the insurer is concerned. You have ever the possibility to make a claim to find the right insurance. 

If you choose a no-claims discount at the insurance company then it will help to offset the pressure of each year increasing premiums. But nevertheless after 5 years insurers cap your discount, and then this option can no longer protect you from the general premium increases levied on their customers. Can you do anything  to escape these rising premiums?

Yes, you can do something. It is the easiest and the most effective to make sure you look around for the cheapest deal. The internet gives you all options. Especially then, when the policy comes up for renewal you can change the insurance. We know, it is not much fun and people do not like it but it will only take half an hour or an hour of your time and there will no doubt you will find a cheaper quote than that of your recent insurer which really would like a renewal. Insurances companies know about this. The time of renewal is difficult for them. If you apply online you often gets you an extra 10% discount, and paying by direct debit from your account will also trim off a bit more of the sum. 

If you want to reduce your premiums at the insurance company there are other things you can do, for example: Have you thought already about home security? Insurance companies look kindly at the neighborhood watch schemes. For the case you have security locks on the windows then a lot of the companies give a discount. Other things are for example external security lighting,  a burglar alarm and better locks on external front doors will also see your premiums go down a bit. Yes, it is true, it will cost you money to install these security devices at your home. Nevertheless these things will also make your home less attractive to burglars. The neighborhood watch scheme will come for no extra cost though. Think about the opportunities you have with your home.

It is really a general rule, do not blindly accept the recent insurance company's renewal quotes. They try to get high rates with each client. Then insurance companies offer the best deals only to their new customers, not their loyal old customers that have been with them for a long time. They pay and do not mention that they pay to much. Do not avoid to save considerably by shopping around. Online brokers at the internet offer access to home insurance quotes, life cover, loans and much other things more. 

11.05.2012