Have you ever wondered why on earth your home insurer wants to know the strange things they ask? You are not alone, so here I explore some of those questions and reveal why they’re being asked.
If you’ve never had to insure a home or investment property before, (or you don’t work in insurance and live and breathe it like I do), getting home building insurance can be confusing.
If you are not a builder, how are you meant to know what it would cost to rebuild your home, and why are you asked all these, seemingly, random questions?
Every question has a purpose, and is asked to help the insurer assess the risk of insuring your property and to work out your premium.
So how do your answers impact the insurance premium? Here I’ve listed some of the most common questions asked by some insurers and explained why they want to know.
Do trees surround your property?
If you have a lot of trees around or close to your property, this can increase your fire and storm damage risk which may increase your premium.
What is your roof made of?
A thatch roof probably won’t be covered by many insurers because it burns too easily and requires a lot of maintenance, whereas a metal roof can be fire retardant and almost maintenance free. Slate and tile (cement or terracotta) are also less likely to burn, but could be more expensive to replace.
When was the home built?
They want to know if your property is heritage listed. Heritage listed properties can increase the cost of your premium because there are often stricter council guidelines around rebuilding, and materials can be more expensive.
TIP! Find out from your local council the heritage requirements in your area. In each council there is a heritage officer, and they can explain why your house is listed as heritage and some details around rebuild or renovation.
The age of a home can also indicate how old some aspects of the property might be, like the electrics, which could pose a greater fire hazard. If you have an older property that has had all the electrics rewired, you should explain this to the insurer as it may bring down your premium. They may ask for a certificate from the electrician as proof the wiring is up to date. Ultimately, it helps if the insurer knows the property has been regularly maintained, has effective fire protection, has been carefully restored and is regularly occupied.
Are there neighbours surrounding all borders of your property?
A property with neighbours on all three sides is generally thought to be more secure than a property without surrounding neighbours, which could lower your insurance premium.
Does the property have an alarm system?
Alarms reduce the risk of break in’s and therefore your premium. Back to base alarms are perceived to offer the highest protection over local home alarms.
Is the property used for business?
If business is conducted from your property, apart from the occasional working from home most of us do at some stage, a commercial insurance policy may be required instead of residential. This is more likely to apply if you are storing the stock/products you sell at your property, so it’s wise to ask your insurer.
Have you had insurance previously, and who with?
If you’ve been insured before and never made a claim, you may be eligible for a discount. The insurer may want to confirm directly with your previous insurer that you haven’t made any claims.
What’s the date of birth of the oldest person who lives there?
Over 55 years used to mean retirement age, so some insurers believe this means someone will be home more often which may lower the risk of theft, and therefore your premium. This person doesn’t have to be a policy holder, but someone who lives in the property – anyone with a financial interest or blood relative of the property owner.
Will the property be unoccupied for longer than 60 days consecutively?
An empty home presents a higher risk of break in, and some insurers have exclusions if a property isn’t occupied after, or for a period of, 60 days. Some may waive that exclusion up to six months if you disclose it.
Does the property have a safe?
If you show that you are proactively careful with your valuables, some insurers may perceive you as a lower risk customer.
Will the house be shared by non-family members?
Boarders are thought to be a higher risk to a property, and may increase your insurance premium. If this is an investment property, landlord’s insurance might also be worthwhile.
If you are ever in doubt about the question or have a unique situation that needs explaining, it might be worth calling the insurer to discuss it. Applying for insurance online is great for straightforward properties, but if yours is unique you may be better off calling and talking to someone.
Have you had a different strange question from an insurer? Tell us what it was in the comments below and we will try to explain why it was asked!
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