by: mbarters@googlemail.com
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Date: Fri, 14 May 2010 Time: 10:27 AM -
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Home insurance is a way of covering your home from risks such as theft or burglary. Your home contents insurance will cover a range of items such as electrical appliances, clothing, and computer equipment, whilst buildings insurance covers against damage to the structure of the property. To work out how much you should pay for your home insurance, the insurer typically works out by postcode the statistics for crimes such as theft and burglary in your locality to get a better idea of the risks for residents in that particular area.
Article Source: DirectoryArticles.com
The problem is that many people feel that the precise area where they live does not necessarily have the same amount of thefts, or risks of theft and related crimes as other parts of that postcode area. It can seem unfair that many residents can appear to be penalised simply for living near an area where there are higher risks of insurance claims due to a higher crime rate.
When told their postcode attracts a higher home insurance price because of the levels of crime, many residents are surprised. Their street or neighbourhood could be virtually crime free but just a couple of miles away a problem area could be pushing up the average crime rate. Other householders might believe that because they live in a more affluent and less crime affected area, this would mean that their homes are less at risk. Unfortunately the area they live in could well include other less well off areas with higher crime rates. One thing to remember is that although an area might not be associated with decline or deprivation, it does not necessarily mean there will be lower crime rates.
Factors such as issues with ground subsidence, coastal erosion and the potential for flooding also feature in insurer's calculations on the risks to your home. Although buildings insurance covers the structure of your home against damage, if there is a history of flooding or other known geological or environmental risks to your home, then the insurer could also assess this on a postcode basis. For example, your postcode area could include a village prone to flooding, where some companies could even consider some properties uninsurable. Although your house might not be at risk, it could still attract significantly – perhaps unfairly – higher premiums.
But there are ways to get round the problems of postcode ratings. To reduce the risk of theft, it's worth looking at ways to improve the security of your property. You should certainly make every effort to tell the insurer of any security improvements you make to your home including door locks, fencing and window locks. Ensuring an alarm for the property is professionally installed and maintained can also help bring down the cost of your home insurance.
Do not assume that a higher premium from one company will mean the same from other insurers. Shop around and compare prices, as the cost of cover can vary across insurance companies. The more information you provide to an insurer about your property, the better informed they will be when calculating the cost of your home insurance, and the less likely you are to lose out in the 'postcode lottery'.
The ease with which people can compare home insurance online makes picking the right policy much simpler now. Mark Bartley offers information on different types of financial products in his frequent studies and articles.
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