The premium of the building insurance is dependent upon various factors. Here are the few general tips that can help you minimize your building insurance premium amount:
- Do not over insure: In case of building insurance, you need to insure up to the amount of rebuilding the building following the damage which will be generally less than the purchase value or the original cost of building. So, do not overestimate the amount of rebuilding.
- Be realistic about the coverages: You pay for what you get. So, be mature and realistic about the additional coverages that you want to add in addition to the basic plan.
- Explore various options: Try to contact as many insurance providers as you can before you select the one with whom you want to go ahead. This will help you choose the best cost efficient insurance provider.
Most of the times, you need to buy office insurance with the building insurance. So, it might be possible that it will be cheaper if you buy individual coverages from different insurance company.
- Pay annually: The premiums for any insurance are cheaper if you buy for multiple years, or pay annually for 12 month policies.
- No-claim discount: the insurance premiums are also dependent upon your past insurance history. So, if you did not have any claims in the past, you are likely to get good discounts on your premiums.
- Higher Excess: Voluntarily paying a higher excess at the time of claim can save you some money on the premium. But, higher access increases your cost of the claim.
The insurer makes a regular visit to your building to review the safety measures installed to minimize the risk of the damages. Here are some of the security and maintenance tips that can help you reduce your premium on building insurance:
- Installation of the burglar alarms;
- Security locks on the windows and doors;
- Appointing sufficient security personnel;
- Fireproofing the building and installing water sprinklers and fire extinguishers;
- Insulated water pipes;
- Protecting the home against potential flooding.
Case on Building Insurance Premium
Mr. Rajat have recently built a shopping mall which has individual spaces to be given on the rent. To cover his perils of the damages, he decided to go ahead and buy an insurance cover for the building. Mr. Rajat has a friend who has been in the business of the construction of the commercial property and renting it out for over 15 years. So, he also had a good experience of buying a sufficient cover for the building.
Here are the few things he suggested to lower the premium on the building insurance:
- To contact at least 10 insurance providers to get their quotes and to check the coverages that they are providing. This helped him finalizing the cost-effective insurance provider.
- He also suggested to estimate the cost of rebuilding the building accurately by taking professional help to avoid unnecessary premium for the over insurance.
- He asked Mr. Rajat to mention to the insurer that he had a very good claim history with no claims in the past, which will buy him some more discounts.
- Rajat was also suggested to let the insurance company know that the fire safety clearance certificate has been obtained from the fire departments and the necessary fire safety equipment have been installed at all the designated places.
- He also informed Mr. Rajat that he is only responsible for the building insurance the tenants need to buy their own insurance for office/shop spaces.
- He asked Mr. Rajat to pay a single premium for the whole year together to avoid unnecessary administration charges.
- He told Mr. Rajat to inform the insurance provider about all the other safety measures that has been installed in building to minimize the risk of damages.