How do we calculate your quote?
We know it may seem like we ask a lot of information from you when you request a home insurance quote from us. But rest assured there are reasons behind this.
We make sure to assess you as an individual, so we can put together a quote that’s tailored to your personal circumstances and home insurance needs.
Here’s a handy guide to some of the things we look at and how we use it to offer you a fair premium and price.
How you affect your quote
Your claims history
As with almost any insurance policy, we look at your claims history. The more you’ve claimed in the past, the higher your premium is likely to be, as this suggests you’re at a higher risk of claiming again in the future. Customers who’ve made few or no claims are likely to be rewarded with a lower premium.
How your home affects your quote
Value of the property
The higher your property’s value, the more expensive repairs are likely to be. However, the property’s market value is influenced by market factors that may not always be relevant, such as proximity to good schools and green space, so we consider its ‘rebuild cost’ a more accurate measure. We’ll get to that later.
Level of security
Homeowners who can demonstrate they’ve taken steps to reduce the risk of burglary may be offered a lower premium for their contents insurance policy. Increasing security through locks, cameras and alarm is a great way of reducing the likelihood of a break-in, as well as possibly bringing your premium down.
The location of your property will help determine its risk of damage from environmental factors, such as storm or flood. Those who live on floodplains or in low-lying coastal regions are more likely to suffer from flooding, so we look at current and historical flood data. Location will be taken into account both for buildings and contents insurance, as flooding may cause damage to the structure of the property, as well as the contents in your home.
Local crime levels
We study crime rates in your local area, using government data, to help us determine the probability of you and your home being the victim of a crime. High crime rates will raise the insurance premium and/or the requirements for security protections, especially for your contents insurance policy, as they suggest you’re more likely to need to make a claim.
Pricing will generally be based on the property being of standard construction, so, if your house is architecturally unique and/or of unusual construction, the potential damage risks and subsequent repair/rebuild costs will be taken into account to determine your premium.
The rebuild cost of your property is how much it would cost to rebuild your house from scratch, today, including any outbuildings and other permanent fixtures. This measure assesses the pure value of the bricks and mortar. There may be a set sum insured in the policy. Features such as age of property, size of property and type of property may be used to assess the value at risk.
How your contents affect your quote
The sum insured needs to be sufficient to replace all of your contents as new. Some policies will ask you to specify an amount and some will have a standard sum insured (which you must still check is adequate). Features such as number of bedrooms and type of property may be used to determine the premium you’ll pay for your policy.
Items over a certain value must be declared separately. This is particularly applicable to items like jewellery, often high in value but very easily stolen, lost or damaged. There will likely be a single article limit and also a limit for accumulation of such items, both of which will affect the premium. Also, if protection is required for these items away from the home, an additional premium will be payable. These items are more likely to result in a significant claim when compared with standard household goods – so if you have lots of them you wish to insure, your premium is likely to go up.
How the level of cover you’d like affects your quote
Whether you require buildings cover, contents cover or both will drastically affect the cost of your home insurance.
Your desired excess
The amount you’re willing to pay on each claim will raise or lower your premium. If your excess is higher, your premiums may decrease, since you’ll agree to take on a bigger share of the costs yourself.
If accidental damage cover or cover away from the home is required, additional premiums will be charged, as there is greater risk of a claim.
How the world around us affects your quote
IPT stands for Insurance Premium Tax and is a government tax on insurers and insurance premiums. This included in any premiums at a fixed percentage. The government is free to increase or decrease the tax rate as they wish, and this will affect premiums.
As material and labour costs increase, this causes the value of claims to increase gradually. This means everyone’s premium rises in line with this over time.
Periods of bad weather or extreme weather events, although unpredictable in their occurrence, need to be catered for in the long term, pricing across all risks.
The claims market
If customers become more or less likely to claim – such as how the industry has seen a spike in claims for escape of water during winter periods – this may be factored into premiums.