How to limit the effects of rising home insurance premiums? – Immo

As a result of the increase in the cost of building materials, home insurance premiums will be adjusted upwards from January 2023. What can you do about it?

In recent months, the conflict in Ukraine and the resulting inflation have affected many sectors: energy, food, construction… The same applies to the home insurance premium, also called fire insurance, which will experience an increase of almost 11% from January 2023. How can this increase explained and can its effects be limited?

In recent months, the conflict in Ukraine and the resulting inflation have affected many sectors: energy, food, construction… The same applies to the home insurance premium, also called fire insurance, which will experience an increase of almost 11% from January 2023. How can this increase explained and can its effects be limited? First of all, the insurance company asks various questions about the home to find out its size and value. It is therefore this evaluation form that will make it possible to calculate the size of the premium and adapt it to the characteristics of the home. In addition to the value of the building, the insurance company is also interested in the risks to be covered: the risk of, for example, storms or floods. Finally, the development in construction prices will also have an impact on the home insurance premium. This is called the ABEX index. These prices are determined by the price of building materials (raw materials) on the one hand and by the wages of construction workers on the other. The increase in home insurance premiums can be explained in two ways. Firstly, as explained just before. these premiums are indexed each year on the basis of the ABEX index. This, calculated twice a year in May and November, was 1004 at the end of November 2022 against 906 in November 2021, i.e. an annual increase of 10.8%. If such an increase comes into effect from January 2023, the majority of insurance companies will apply it only once a year on the anniversary of the insurance agreement. Any owner can thus expect an increase of at least 10.8% on his future insurance contract. Secondly, some insurance companies apply a price increase to remain profitable. Thus, in the event of damage, an insurance company can increase the premium in order to maintain the balance between the amount of this premium and the compensation paid to the affected household. For example, a customer who is insured for 500 euros can theoretically submit a claim that costs 600 euros, i.e. a loss of 100 euros for the insurance company. At the same time, the insurance company depends on other associated costs, which can affect the size of their customers’ premiums. If your premium is indexed: The calculation of the ABEX index will only affect the premiums from January 2023. And a priori, insurance companies do not modify a current contract and wait for its renewal to pass on this nearly 11% increase. There is therefore still time to change insurance companies or change the terms of your contract to revise it downwards. You will thus benefit from a new contract valid for one year and still based on the previous ABEX index, namely the one from May 2022. But beware, “given that the ABEX index is used in almost all housing contracts, you don’t have a lot of freedom of action”, warns the consumer protection organization Test Achats. If you cannot oppose this indexation, you can terminate your contract, provided you respect a notice period of three months before the end of the contract. A registered letter is often required If your premium is indexed AND increased: If your insurance company decides to raise its rates, you have greater leeway to change your contract or change insurance company. A possible rate increase represents a unilateral change to the insurance conditions. “In this case, the insured has the right to terminate his contract and take out insurance elsewhere”, clarifies Test Achats. The notice period will then be shorter: one month before the end of the contract. Don’t forget to send a registered letter.. Not all insurance companies have the same rates or the same conditions. Do not hesitate to compare the offers on the market at regular intervals. There are online comparators that can direct you. If you do not touch your insurance premium, the contract is often automatically renewed. However, a family situation is never set in stone. In the case of moving, renovation or extension work, purchase of goods, the insurance premium is added… It is a good idea to review your contract according to your needs. In addition to home insurance that covers damage to the building, there is actually contents insurance to add to your contract to protect the home’s items and furniture. Especially the oven, the computer, the TV, the clothes…

.

Leave a Comment