Increased Premium for Business at home.

PH158

Why do insurance companies increase the premium for home and contents isurance if you happen to run a business from home. They don't include any cover for the business just charge you more. Seems like just profiteering to me. Are there any insurance companies that either don't increase premiums or if they do include business cover?

[Deleted User]

Higher risk, such as third party traffic through your home or additional equipment.

Dangermac

PH158 wrote: »

Why do insurance companies increase the premium for home and contents isurance if you happen to run a business from home. They don't include any cover for the business just charge you more. Seems like just profiteering to me. Are there any insurance companies that either don't increase premiums or if they do include business cover?

If you think that your insurer's premium is too high, have you considered looking at other providers? There's a fairly wide Household Insurance market in the UK. You seem to imply that there is only one insurer available.

Profiteering can generally only work if you are beholden to a single provider. By virtue of the fact that you are (or at least should be) free to shop around, I struggle to comprehend that this could be profiteering.

The increased premium may be justified/unjustified, depending on how the insurer perceives the risk, and depending on the extent of 'business use' which you have not expanded on. Business use could range from the running of a leisure centre in your garden, to simply doing a little paperwork from your back bedroom.

DM

PH158

I could understand the extra premium if they did cover business activities but they don't. Its just extra for just having a business.

PH158

So far all the companies I've tried charge extra 30 to 70% for just having a busienss and most don't want to discuss the actaul nature of the business. They don't cover any of the business activities unless you pay even further premiums. So it seems to me that anyone who is for example self employed gets a premium hike just for being self employed.

Sea_Shell

What's your declared occupation?. It'll be this in conjunction with business use that'll probably be what they're rating on.

Old_Lifer

You need to explain to the insurer the exact nature of your business.


If your home is used for any business use this should be declared to the insurer,



Although a little clerical work done by yourself would probably not cause concern, the insurer will want to know for example, if there are any visitors to your home connected to the business, if any business equipment is stored at the home, if anything which is potentially a hazard is stored on the property. For instance, there would be concern if a self-employed decorator stored tins of paint at home.


It is as zx81 says, running a business from home can in some circumstances create a higher risk.

winspiration

I run a small mail order business from home and have contents / buildings insurance with Nationwide at a reasonable price. I have separate business insurance which covers the stock etc. When I took it out, they did question me including whether I had customers calling at the house (I don't) and the value of the stock I hold at home. Even though it isn't covered on the home policies, obviously it could be a potential risk factor if you hold a high value of stock on the premises, or, as above, flammable products etc. I was with Direct Line previously, but found there was a steep rise in price each year.

What I did find was that it was no good using comparison services for something slightly out of the ordinary (although I'm sure it isn't that unusual to run a business from home), it was a case of ringing up and explaining the circumstances before getting a quote - another alternative might be to try an insurance broker?

eddddy

PH158 wrote: »

Why do insurance companies increase the premium for home and contents isurance if you happen to run a business from home. They don't include any cover for the business just charge you more. Seems like just profiteering to me. Are there any insurance companies that either don't increase premiums or if they do include business cover?

Usually, the starting point for setting premiums is past claims experience.

i.e. The insurer's quoting system looks at which boxes were ticked etc, on policies it has sold in the past, and compared that against claims made on those policies.

And I guess the insurers' systems found that people who run businesses from home have a higher claim rate and/or larger claims than people who don't run businesses from home.

Hence, the higher premium.

marlot

My wife runs a little crafting business. When she used to run classes at home, my insurance was almost £1000 a year. Despite her having specialist insurance to cover personal injury, stock etc.

When she moved to using the church hall, I was able to get Aviva to cover us for 'minimal business use' at no extra cost. A little bit of stock (insured on her craft insurance), and visitors just to pick up their orders. I had to phone Aviva though, and be clear on what activities took place.

PH158

Thanks for the advise to contact them directly. These seems to make a lot of sense, rather than depend on the rather broad brush of comparison sites.