How to calculate your insurance premium

Your contents insurance premium is based either on the number of bedrooms you have, or your estimate of the value of your possessions. Buildings insurance is calculated on the rebuilding cost of your home. It's worth calculating these properly, as they will dictate the value you are insured for. If you underestimate and are underinsured, the value of any claim you make may be reduced in proportion. Different methods suit different properties.

Your postcode
Where you live has a lot to do with the amount you pay to insure your home. Different postcodes are rated on an estimate of the risk in that area. A higher risk area could be one with a 'high crime risk', or a history of flooding or subsidence. Obviously you can't do much about this, but if you're in a high crime area, it may be worth investing in extra security.

Accidental damage
There are usually two types of cover:
Standard - usually covers events such as storm, flood and fire. It may also include some accidental damage to windows and TVs for example.
Extended accidental damage - covers any accidental damage to the property like falling through the attic roof or paint spillage. Obviously this costs more but it offers more comprehensive cover.

Security
Improving your home security will obviously help to reduce the risk for you, but it can also lower the cost of your premiums. There are three main types of security:
Approved locks on all external doors and windows
A NACOSS approved and maintained alarm
Neighbourhood Watch schemes.