Understanding your renewal premium

Calendar showing renewal date

Your insurance policy has a renewal date which is the year anniversary of your policy.  On this date, you will receive a renewal notification which often results in an increase in premium.  The reason for this is Insurers may adjust your premium to cover changes in risk and claims-cost inflation expected over the coming 12 months.  The chance of you having one or more claims in the next year and the expected costs associated with these claims have the biggest impact on your monthly premium but let’s take a look at the three main factors that influence your renewal premium:

  1. Increases on home contents, building and all risk items

Home contents refers to everything inside your home – furniture, appliances etc.  Building is the structure of your home and all risk items refers to those items that you regularly take out of your home such as your mobile phone, laptops, tablets, handbag etc.  Increases on these areas are influenced by CPI (consumer price index).  The cost to repair or replace these items naturally increase a year later due to inflation.  The good news is although the premium for these items increase, Insurers also increase the sum insured for these items.

  1. Claims history

At renewal stage, an Insurer will assess your claims history over the past 12 months and assess the value and frequency of these claims.  This information is used to  determine the likelihood of you having a claim in the next 12 months.  Other risk factors are also considered such as your age, driving experience and overnight address.

  1. Vehicle depreciation

It may seem confusing that your premium increases when your car’s value decreases every year.  Yes, the value of your vehicle does depreciate every year and while insurers do take this into account, it is by no means the only factor which determines the premium. Majority of insurers’ claims are accident related with very little being stolen or write-offs. One of the main factors in determining vehicle premiums is the actual cost of repairing the vehicle and its parts, these parts will increase in cost with inflation and fluctuating exchange rates. Therefore, regardless of a customer’s claims history, premiums will increase to cater for the increase in the cost of repairing accidental damage.  Please read our blog here which discusses this topic in more detail.

At Winsure, you can be rest assured that we review the renewal notifications before sending to you, our client.  We ensure that what has been proposed is fair and market related.  By the time you receive your renewal notification from Winsure,  we have already negotiated the best premium for you on your behalf.  As we look after your claims record and portfolio, we are in a position of power to successfully negotiate increases down whilst ensuring that your cover, excesses and limits are all fairly aligned to the premium you’re paying.