Inflation and Your Insurance – What You Need to Know

Inflation Insurance

Insurance for your block of flats is a tricky thing to manage at the best of times. Deacon Insurance, a company specialising in finding the best policies for blocks of flats, admits that it’s a complicated procedure that induces anxiety for many people. Current events are making things even more complicated and even more expensive. 

So, is there anything that can be done to manage the damage?

Everything’s Going Up

You might be fed up with hearing this, but inflation is real, it’s happening now, and it’s making life a lot more difficult for people around the country. Inflation has now risen to 9 percent, with the figure likely to hit double figures by the end of 2022. The rising price of energy, fuel and food is partly responsible for this massive inflation and the cost of living crisis is set to make trouble for many for some time to come. One finance analyst acknowledged that “the financial squeeze is well and truly on.” If you’re feeling this stressful squeeze, you are far from alone.

Why Insurance is Affected

Due to inflation, as a policy holder you need to expect above-inflation increases in the average renewal costs this year. As the world picks up speed after two years of Covid-19 restrictions, demand is increasing dramatically as global economic activity resumes as normal. This is driven up the cost of goods. Besides that, a number of different factors are resulting in disruptions to the supply chain. All of these elements are causing the price of practically everything to creep up. In terms of insurance, it’s more a rocketing price than a creeping one, and that can make renewal of a policy even more daunting. 

So, now we know why it’s happening, what can be done to lower your insurance rates and make life a little bit easier for you?

Tips for Lowering the Bill

Don’t skimp on cover but instead try your best to follow these suggestions and you’ll find you have a relieving reduction in your insurance premium.

    1. Prevent not cure. Educate occupants on how to check for problems before they escalate and carry out regular maintenance checks to ensure things are working correctly and efficiently. If you can see to a dripping tap before it causes water damage, you’ll save yourself a lot of time, stress, and money. You’ll reduce the risk of having to file a claim and the less claims you make, the less of a risk you’ll appear to be to potential insurance providers. Put the time and effort in before and you’ll thank yourself later.
    2. Keep your cover up to date. Inflation is affecting repair and rebuilding costs significantly and if you’ve made any improvements to your property this will increase the value and thus the needed cover. Consider recommissioning valuations regularly so you have a current estimation of the worth of the property. This will give you the peace of mind knowing that there’s less risk of becoming underinsured.
    3. Balance cover and excess charges. It might be tempting to lower your cover costs by upping the excess, hoping that you never need to make a claim. In a property of multiple occupancy, the likelihood of never having to make a claim is quite low. With this being the case, it will be better if you can make a higher payment regarding the initial premium so that you don’t have a to pay out a big chunk in the form of excess. However, if you’re confident that you can keep the excess amount in your bank to pay out when a claim is made, it might be worth the risk to have the benefit of a lower premium. 

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.