• Whenever you intend to purchase a home insurance policy, you typically review the quotes from various insurers. In addition to the cost, it is important to examine the coverage provided by the insurer for a specific plan. Nonetheless, you might receive a high quote for your home insurance policy for several reasons, which we will cover in this blog.

7 Reasons behind High Home Insurance Quote

1. Renovation of house
   Home insurers assess the house’s premium based on its current condition such as amenities, size, and essentially, the overall design of the home. If you make modifications to your house and add some new features inside your home, such as a modular kitchen and a home theatre system, it will influence your home insurance premium for the upcoming year. The premium of your home insurance policy will be calculated with the addition of the modular kitchen and a home theatre system, thus raising the premium rates of your home insurance policy.
   
2. Home insurance deductible
   A deductible is an amount you contribute towards a risk before the insurer pays the claim. Therefore, it is up to you to select the appropriate deductible amount when acquiring the policy. It is similar to stating that the lower the deductible, the less you save on premiums. For instance, if the premium amount of your existing policy is Rs. 30,000, and you have agreed to pay a deductible amount of Rs. 5,000, the insurer will disburse Rs. 25,000 at the time of claim following the deduction of the deductible amount.
   
3. Disaster prone areas
   If your home is situated in a disaster-prone or natural calamity-prone area, it will raise the home insurance premium, whereas homes in a low-risk area tend to have lower premiums. It also depends on whether you reside in a densely populated urban area. For example, if you live in a house in the mountains that is at risk of landslides, the house insurance premium will increase.
   
4. Inflation increases
   In India, inflation is reaching unprecedented levels every other year. Correspondingly, insurance companies adjust their rates as inflation rises. It is contingent upon the price range of home appliances; insurance rates are modified accordingly. To measure inflation, the insurance company refers to the consumer price index to adjust its rates. This is one of the primary reasons for the rise in insurance policy premiums, even when no changes or renovations have occurred.
   
5. Credit history
   If you are a longstanding home insurance policyholder, then your credit score will affect the premium rates of the policy. The insurance company reviews your credit score. Individuals with a poor credit history, such as bounced checks, are perceived as a financial risk by insurance companies. A bad credit history can elevate the premium of your home insurance plan.
   
6. Size, age and construction
   The dimensions of your residence, the age of your residence, and the manner in which it was built are also elements that can affect your home insurance premiums. This is because if you reside in a house that is 30 years old with poor construction and choose to rebuild it. Then the evaluation of your home insurance policy’s premium will be based on these aspects.
   
7. Crime-prone area
   If you reside in a neighborhood that is susceptible to theft and burglary, this will elevate the premium of your home insurance policy. The insurer assesses the crime statistics for that region. They also review the amount they have paid previously for claims related to theft and burglary. The rate depends on your city, neighborhood, or streets.
   
   Conclusion
   
   When you are acquiring a home insurance policy, then the factors outlined above will significantly influence the premium for your specific plan. You can choose the HDFC ERGO home insurance policy and benefit from discounts of up to 45% on the premium.
   
   Disclaimer:
   The information provided above is solely for illustrative purposes. For additional information, please consult the policy wording and prospectus before finalizing the sale.