Top Financial Tips For Families Adjusting To Higher Home Insurance Premiums

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Top Financial Tips For Families Adjusting To Higher Home Insurance Premiums

You’re not imagining it - everything really is more expensive these days. Groceries, fuel, airfare, entertainment, and utilities. People applying to get a new home loan likely have noticed that insurance coverage costs are also rising. Sometimes it can be hard not to feel powerless in situations like this, unsure how to navigate an ever-increasingly expensive market.

We’re here to offer a helping hand. Continue reading for actionable advice tailored for households seeking to ease their financial strain in 2024, with our top financial tips for families adjusting to higher home insurance premiums.

Why The Increase?

Nothing happens in a vacuum within the financial sector. Insurance costs are influenced by many factors that constantly fluctuate, and affordability is proving to be a growing challenge for Australian households. To make sense of the chaos, remember these common elements that might be contributing to your monetary pain.

Construction Costs

Builders are subject to the same economy we are. As their raw materials and labour expenses rise, they accordingly increase rates for building or repairing your home to cover their costs and ensure they are still earning a decent profit - and living.

Market Trends

The economy is rough, and currencies and stocks are unstable. Uncertainty fuels speculation, and insurers aren’t immune. Like with many other industries, prices rise and fall accordingly.

Credit Score
Did you know that in some jurisdictions, your credit rating can affect how insurers evaluate the risk of offering you coverage? If your score is high, chances are it’s reflected in your premium. The good news is, you have some power to change that.

Cyber Liability Insurance

Cyber Liability Insurance is designed to help protect you from claims and support your profitability in the event of a cyber breach or attack.

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Public Liability Insurance

Public Liability insurance is there to provide protection if someone makes a claim against the insured, the business or its employees.

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Business Insurance

A business insurance pack can provide cover for your business premises and contents, against loss, damage, theft or financial loss from an insured interruption to the business.

Details Get Quote

Claim History
Similar to credit, if you have made significant damage claims in the past, this activity could impact the premiums offered. Luckily, again - there are some steps you can take to reduce the potency of your claim history.

Review Current Coverages

Does your current policy effectively meet your needs? Reviewing each line item within your insurance coverage at least once per year is a good idea. Some families use more frequent intervals, such as every six months or quarterly.

Lifestyle changes, unforeseen events, and property updates should all give you pause to consider how these events affect the needed coverage. Regular reviews allow you to identify potential gaps or excesses in your policy.

Ensure your liability limits are sufficient to protect your family from lawsuits in the event of an injury. Review your home inventory of assets covered to ensure loss protection, and remove expensive items like automobiles, jewellery, or musical gear.

Also, revisit your deductibles specified within the policy. Increasing your out-of-pocket expenses paid before your coverage kicks in can lower your insurance premium. But carefully weigh the trade-offs to be sure you’re comfortable with the risk levels involved.

You’ll want to consider factors like the location and age of your home, relating to the potential need to file a damage or repair claim. Do a personal financial assessment to better gauge your ability to absorb the upfront deductible costs resulting from unexpected events. Talk to your provider to determine whether the premium savings justify the increased potential deductible outlay.

Shop Around For Best Rates

Like other industries, the insurance world is competitive. If loyalty to your current provider isn’t resulting in favourable terms, engage in ample comparison to shop for better service and premiums with another company.

Create a short list of reputable providers in your locale with a track record of financial stability, good customer service, responsiveness, and positive reviews. Seek feedback from close family members and consumer advocacy organisations.

Once you’ve identified a set of potentials, start requesting coverage quotes for services similar to your current policies. Compare the limits, deductibles, and additional line items that might indicate coverage exclusions or special declarations. If there’s any confusion, seek clarification and get a second opinion by having your attorney review the policy for red flags.

Identify Discounts And Savings Opportunities

When comparing providers and reviewing your existing policy, look for declarations entitling you to rate reductions for meeting specific requirements.

For example, a safe driving record, stellar credit history, safety features like smoke detectors and sprinklers installed in your home, and a claim-free history are all assets to take advantage of. Some providers are willing to compete by bundling all of your insurance needs into one global policy, including life, auto, home, health, and business insurance.

Also, remember that superior customer service is vital in times of need. Research the provider’s reputation concerning how quickly and attentively they respond to policyholder inquiries and new claims. Don’t overly focus on price to the extent that it blinds you to other important factors.

Finally, assuming you are happy with your current provider, it won’t hurt to price-shop annually to stay abreast of the market. Frequently reassess your needs, gather the best offerings, and keep the communication lines open with your agent. Give them a chance to keep proving themselves as the best option in your jurisdiction.

Discretionary Cutbacks

Unfortunately, in lean times, families must make sacrifices to prioritise the security and fallback protection that home insurance provides. To stay resilient and reduce financial strain, identify opportunities for budgetary savings, including refinancing your mortgage, eliminating luxury purchases, dining out, and cutting back on other entertainment expenses.

Supplementing your primary income source by adding new streams such as freelance or consulting side gigs, or perhaps monetizing a hobby can all work towards satisfying monthly premiums. Consult your family and financial advisor for more advice on responding to the rising costs of homeownership.

*****

With the right financial advice, and some careful cutbacks, higher home insurance premiums can still be affordable. There’s nothing more valuable than the home that keeps you, your family, and your belongings safe - so prioritise it as such. Home insurance may seem like an overly expensive unnecessary choice, but the reality is that taking the steps to keep your contents and loved ones safe is always worth it.

General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

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