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What Is The Cost Of Home Insurance?

Have you ever wanted to buy a home and wondered what the cost of home insurance would be? Understanding the cost of home insurance can be challenging, especially with so many factors at play. This article will explore the critical components of home insurance and what is usually included in a home insurance policy. We will also provide an overview of the average cost of home insurance in Cyprus and discuss other factors affecting your premiums, such as location, credit score, etc. 


What Is Home Insurance & What It Usually Covers?

Home insurance is a crucial protection for homeowners, providing financial security for unexpected damages or losses. This insurance policy typically covers your home in case of fire, flood, damage, or theft of contents. When you purchase home insurance, you'll pay a premium based on your coverage level and risk, allowing you to make a claim when needed.


In Cyprus, home insurance is available in three main types: building & contents Insurance, home fire insurance, and jointly owned multi-insurance.


  • Building & Contents Insurance:Covers the physical structure and personal belongings in your home, including the walls, roof, floors, furniture, clothing, and electrical goods. It also covers any permanent fixtures and fittings, such as built-in wardrobes, kitchen units, and bathroom suites. This type of policy is designed to provide financial protection in the event of theft or damage.


  • Home Fire Insurance:Covers many hazards, with the main coverage being damage or loss from fire, lightning and explosion. Fire insurance offers financial security and peace of mind for property homeowners, since they know they will get compensated for restoring their property in the unfortunate event of a fire. Fire home insurance can also be available for mortgage properties.


  • Jointly Owned Shield:This is a comprehensive policy for community buildings, combining buildings insurance (Shared Property and Community Buildings Units) and personal injury or property damage that may be caused to third parties.


Additional coverage options are usually available, such as:


  • Loss of use coverage:It covers the expenses incurred from being temporarily displaced from your home if it becomes uninhabitable due to a covered peril. Loss of use coverage will cover costs such as rent for temporary accommodation, food, and other related expenses. This coverage is typically included in most home insurance policies, but the amount of coverage can vary.


  • Liability coverage:This is another crucial aspect of home insurance that covers the policyholder if someone gets injured while on their property. It can help cover medical expenses, legal expenses, and compensation if someone files a lawsuit against the policyholder. Liability coverage is essential as it can protect homeowners from the financial burden of paying for damages or medical expenses resulting from an accident on their property.


  • Employer liability insurance:If you employ domestic workers like maids, nannies, or caregivers in Cyprus, your home insurance policy should include employer's liability insurance. This coverage protects against claims made by employees for any injuries they suffer while working in your home. It also covers any illness that may result from the work they do in your home. Employers' liability insurance ensures that you don't have to pay for compensation out-of-pocket and that your employees are protected.


When purchasing home insurance in Cyprus, it's essential to understand the different types of coverage available and any additional coverage that might be needed. Knowing what your policy covers and ensuring you have adequate protection is essential for protecting you and your home.

What Factors Affect The Overall Cost of Home Insurance?

The average cost of home insurance in Cyprus is typically around €2.5 for every €1000 of property value. If your home is valued at €200,000, you can expect to pay approximately €500 per year for home insurance. However, it's important to note that the home insurance cost can vary depending on several factors, such as:

1. Location of the Home

Various factors, such as the home's location, contribute to determining the overall cost of home insurance. Homes in areas with frequent natural disasters, like earthquakes, tend to have much higher insurance premiums due to the potential for catastrophic damage. Areas with high criminal activity rates may also come with more expensive policies, given the increased risk of burglaries and vandalism on local houses.


Knowing your area's risk profile can help you anticipate your policy's cost and ensure you're adequately covered against potential losses.

2. Age and Condition of the Home

The age and condition of a home can have a considerable impact on home insurance prices. Newer homes or those that have been recently upgraded are usually more cost-effective to insure than older dwellings that need restoration work. Consider any required repairs when shopping for home insurance because many insurers will ask you about the age and condition of your house.


Investment in preventative maintenance or renovations can save you money in the short- and long-term by keeping your insurance rates low.

3. Size of the Home

The home’s size is a critical aspect to consider when getting insurance coverage. Generally, the cost associated with insuring a larger home tends to be higher than that of insuring a smaller one. This is because big houses usually come with more valuables and, due to their structure, are typically more costly to repair or rebuild in the event of damage or destruction. However, this does not mean homeowners should avoid buying or building larger homes. Instead, it is crucial to consider your home's size carefully when opting for insurance coverage.

4. Deductible Amount

Choosing the right deductible for your home insurance plan is an important decision. Going too high with a deductible can leave you unprotected in the event of an unexpected loss and unable to cover the cost of repairs. Going too low can result in higher premiums without much-expected benefit.


It's important to consider how much you're comfortable paying out of pocket in case something happens and how much you can pay each month for your premiums. That way, you can balance between minimizing costs and being confident with your coverage.

5. Type of Coverage Desired

When selecting your homeowner's insurance policy, it is essential to consider what kind of coverage you desire. Depending on that, what you decide to include may influence the cost of the policy. For example, if you wish to have additional protection against flood or earthquake, this will likely increase the cost of your plan. Review all coverage options carefully to ensure you get exactly what you need for a price that works for you.

6. Number and Type of Claims Filed In Recent Years

The amount and type of claims filed by policyholders have increased over the past several years. As more people become aware of their insurance coverage, they increasingly file claims for various reasons. This can be beneficial for policyholders as it helps ensure that their needs are met. However, an increase in the number and type of claims can hurt insurance premiums.

Insurance companies use this data to calculate risk, so if you've filed multiple claims in the last few years, you may find your premiums have risen. Therefore, it is important to consider whether filing numerous claims is the best choice for your long-term financial well-being.

7. Credit Score or Other Financial Factors Affecting Premium Rates

Insurance providers tend to evaluate your credit score to understand the level of risk they may have to take when insuring you. A lower credit score indicates a higher potential risk, while a higher score generally translates into lower premiums. 


The company may also review other financial factors, such as income and debt-to-income ratio, to determine payment history and capacity for risk accordingly. Ensuring good credit habits is the best way to maintain an attractive premium rate with your insurance provider.


Researching and asking questions about these factors is integral to finding the right coverage for your needs at a price that suits your budget. With care and consideration, you'll be able to find an affordable yet reliable home insurance policy that meets your requirements and protects you in the case of an unexpected loss.

How Much Home Insurance Do I Need?

You must consider several factors when determining how much home insurance you need in Cyprus. The first step is determining whether you need buildings and contents-only insurance, fire insurance, or a combined multi-policy covering everything. Whether you are a homeowner or a tenant, ensuring you have the right level of protection will give you peace of mind knowing that you are adequately covered against any loss or damage.


Tips For Calculating Your Coverage

  • It's essential to calculate the rebuild value of your home rather than its market value. The rebuild value includes the cost of building materials, labor, and professional fees in case of damage to your home. Over-insuring yourself by using the market value will lead to higher premiums. Assess your rebuild costs every five years to ensure you have adequate coverage.


  • Go room by room, evaluate each item, and decide which ones are worth insuring. Estimate the replacement price of each item and add everything together. Remember that home insurance provides new-for-old coverage on belongings, so estimating the expenses you would pay if you had to buy new items is important.


Avoid using the original prices you paid since these prices may not reflect the item's current cost. If you purchase new and valuable items after you've taken out your policy, contact your insurer to add these items to your cover.


  • For multi-insurance, you must calculate your belongings' rebuild value and estimated replacement costs. Include all furniture, electrical appliances, jewelry, and artwork in your calculation.


Another factor to consider when determining your level of home insurance coverage in Cyprus is the specific risks your property is exposed to. Cyprus is located in a region prone to natural disasters such as earthquakes and floods. Therefore, it's crucial to check if your policy covers these events or whether you need to purchase additional coverage. Remember that additional coverage options will increase the cost of your policy.

Can I Cut Off Any Home Insurance Costs?

Home insurance is an essential expense that can help protect your home and belongings from unforeseen events. But that doesn't mean it has to break the bank. Here are some additional tips to help reduce the cost of your home insurance policy in Cyprus:


  1. Combine policies:Opting for the same provider for buildings, contents and fire insurance might get you a discount. It also makes it easier to claim for something that has affected the whole house. Combining policies is a popular choice in Cyprus, and many providers offer discounts when you take out many types of insurance together.
  2. Take advantage of insurance offers:Many providers in Cyprus offer special discounts or promotions to entice new customers. This could save you a lot of money.
  3. Pay annually:This could lower the cost if you can afford to pay your home insurance policy annually. Many providers add an extra fee for monthly payments, which can increase the overall cost of your policy by around 6%. Paying annually could help you avoid this additional fee.


By following these tips, you could reduce the cost of your home insurance policy in Cyprus without sacrificing the coverage you need.

Insure Your Home In Cyprus With Trust Insurance

The right home insurance policy can help protect your property and belongings in an unexpected disaster. To find the right policy for your needs, speak to one of our experienced insurance agents of Trust Insurance all around Cyprus.

Our policies are tailored to the specific needs of Cyprus-based homeowners, and we make sure you have the coverage you need at an affordable price.

Don't wait until it's too late to protect your home and belongings! Contact Trust Insurance today to get a quote and find out how we can help you protect what matters most to you and your family.

Learn how to protect your home from the thieves.

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