When you think of the cost of living crisis, it’s easy to think of the increases we see in tangible products. A loaf of bread, a full tank of petrol, energy, and electricity – these are things we expect to jump up in the wake of inflation. What’s harder to explain are the increases in the intangible things, like insurance premiums. As insurance expert Deacon admits, if you have the responsibility of purchasing building insurance for a block of flats, the rising costs of premiums may be a growing concern for you. There are reasons to explain this trend and fortunately, there are things you can do to help keep the costs down as much as possible.
The Reasons Behind the Rise
The reasons behind the inflation in the building’s insurance market are the same as those affecting the whole global market. The pandemic of the last few years caused major disruptions in the worldwide supply chain. Sanctions made on Russia since its invasion of Ukraine earlier this year have meant they can’t be the source of many major building materials they used to export to the US and UK. Sadly, there is no control to be had over these global issues. They are causing building material costs to skyrocket. A house that used to cost a certain amount to rebuild would now cost a lot more. As the value of buildings increases, so do the funds needed to cover repairs and rebuilding in the event of a claim. This means that buildings are becoming more likely to become underinsured and this, as you no doubt know, is a dangerous place to be in.
Fighting the Inflation
While you can’t control worldwide inflation, you can make changes to lessen the impact on you and your building insurance premium costs. The cost of rebuilding is just one factor that affects building insurance premiums, the other being the increasing number of claims being made. If you can keep claims to a minimum and showcase a reasonably short claims history, that is the sign of a well-managed and maintained property. This good reputation is often reflected in an insurance premium quote as you will appear more attractive to insurance providers. Find ways to reduce the numbers of claims you make, and you’ll notice the benefits when it comes to your insurance costs. One of the most common causes of insurance claims is water damage, yet it also remains one of the most preventable. Work hard to educated residents in the importance of remaining vigilant and finding potential problems before they develop into serious issues. If repeated claims are made for the same single cause, premiums or excesses are bound to jump up in price. If repeated claims continue, it may even push an insurer to decline to provide cover to you all together! The insurance market is hardening so it’s becoming even harder to find an insurance provider that’s willing to take on a risk. To ensure you find an insurance provider, while keeping the premiums as low as possible at the same time, it’s vital to make yourself as low a risk as possible. Just like a car insurance provider is going to be reluctant to help out a repeatedly dangerous driver, building insurance providers are going to avoid insuring properties that repeatedly deal with avoidable problems resulting in expensive claims.
The Bottom Line
In conclusion, there are numerous reasons pushing up the prices of buildings insurance premiums. Furthermore, there are things you can do to lower the cost and stay profitable. s