You don’t need an expert to tell you that prices are going up. In some fields and markets, prices are through the roof. Worryingly, in the uncertain world in which we live and work, it can feel like you are on a financial rollercoaster, and you don’t know when the next drop or climb is going to come hurtling around the corner. Do you feel like that at times? Do you feel as though it’s hard to make financial decisions because you just don’t know which way things are going to go?
The current time of inflation is affecting everyone and everything. From ice cream to electric irons, from cinema tickets to gardening products, costs are rising at a phenomenal rate. In July 2022 inflation hit double figures at 10.1 percent and is expected to rise to a staggering 18 percent by next year. A market that has not gone unscathed by the recent inflation hikes is that of insurance. That may be surprising, but inflation is making insurance premiums jump up too. Let’s consider why that is and what you can do to save yourself some money.
Why Building Insurance Premiums Are Inflating Too
As the cost of everything goes up, so do the costs of repairing damages to property. In fact, Deacon, a specialist in building insurance estimates that a block of flats that would have racked up $500,000 in expenses in a rebuilding project two years ago would now cost upwards of $544,000 to rebuild. The problem is that this increase won’t just make the difference when you need to claim on a building that is a total write-off. Even every small claim you make will be affected by the increase in building materials and labour.
The pandemic put a halt on almost every industry and building one was one of the biggest impacts. As the months rolled by, the waiting lists grew longer and now the demand for builders and tradesman is higher than ever. The higher the demand, the higher the price and insurance companies know this. In order to make money themselves, insurance providers need to up their premium prices to cover the expense.
What You Can Do to Deal with the Damage
If your building insurance premium bill makes your eyes water, it is possible to do something to make it a little easier. As best you can, try to make yourself more attractive to insurance providers by being less of a risk. The lower the liability, the less likely you will make a claim so the cheaper your insurance will be. Keep on top of issues and damages in the building and pre-empt problems before they develop into more serious disasters that could lead to a claim. Educate yourself in basic maintenance procedures so that you can spot leaky taps and deal with them promptly. Premiums go up the more you claim especially because of the same issues so stay ahead of the game by being more proactive in dealing with things. Furthermore, if you have enough saved up, you can save money on your premium by opting for a bigger excess. You will have to pay more when you make a claim, but it will lower your premium significantly. If you have the financial stability to take this option, it may work out more economical for you in the long term.
In conclusion, premiums are on the up for a number of reasons but you don’t have to be a sitting duck. You can make changes to stay afloat during these stormy times.
