Home Insurance

How Is My Home Insurance Premium Calculated?

Factors that determine your home insurance premium cost

  • By Paddy Compare
  • 20 July 2023

Insurance policy plans are usually complicated. Understanding every nitty gritty and knowing exactly how insurers arrive at a final price is often difficult. A quick fact to always remember when figuring out the right insurance policy is that insurers calculate everything based on one main factor - risk.

Typically, home insurance in Ireland is a combined package policy that protects the structure of your home and the contents inside it. When calculating the final price of your home insurance, a number of components are considered.

With Paddy Compare, thoroughly understand policies and get in touch with local brokers in a matter of minutes!

Before delving into factors that affect your insurance premiums, here are the primary types of home insurance listed:

  1. Home contents insurance
  2. Building insurance
  3. Buildings and contents insurance
  4. Holiday home insurance
  5. Unoccupied home insurance

It's important to understand who needs home insurance in order to make an informed decision about the best suited policy.

Factors affecting the premium of your home

All factors affecting the premium of your home insurance policy are based on the risk level involved in each. While every policy is different these factors are typically common factors that affect the cost of your home insurance policy.

  • The Address - Your eircode and house number can be one of the most crucial factors affecting your home insurance policy.
    Some areas are prone to flooding while others may be experiencing a surge in crime. On the other hand, if you live in a posh area, insurers are likely to presume that you have more valuables.
  • Your Lifestyle - On a more personal level, your lifestyle is likely to affect the premium of your home insurance.
    For example, if you have kids, if you smoke, or if you're over 50 your premium is going to be calculated based on the risks that are associated with these factors.
  • Your Valuables - The number of items you own and their value also play a key role in deciding your premiums. These valuables could be anything from first-edition comic books to antique paintings.
    The more valuable your belongings, the higher the chance of you wanting to get them replaced or compensated.
  • The structure of your property - The kind of structure your home has will determine the risks it's prone to. You have to pick a policy depending on the structure of your home.

For example, if you have a wooden roof, the risk of fire damage is higher. Or if you have a unique structure, a normal repair job might not work.

  • Size of the property - There are two factors to this. A larger home is likely to have a higher repair cost and it can be presumed by insurers that the larger your property, the more valuables you probably have within it.
  • Security measures - Installing devices like fire and burglar alarms can help bring down your premium cost. If you're struggling to find insurance after a break-in or fire, increasing your security measures can appease insurance providers.

Other than the above factors, the cost of your home insurance premium also varies depending upon what is covered in your home insurance policy and whether or not you are opting for add-ons.

By looking into the factors that affect the cost of your home insurance and considering the measures to get cheap insurance before buying or renewing your home insurance policy, you can get the best policy for your home while saving money!

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