What’s the average home insurance cost in the UK? What factors affect the price of home insurance? And how do you get it cheaper?
We answer all of those questions and more right here.
What is home insurance?
Home insurance is a type of insurance that is made up of buildings insurance and contents insurance, with the possibility to add on additional covers such as Personal Effects, Family Legal Cover and Home Emergency Cover. It covers your home in response to a range of unforeseen events, including fire, flood, or other external damage, and the theft or damage of your contents.
You can buy these types of insurance individually or combine them into one (often cheaper) policy.
What is the average cost of home and contents insurance?
According to data collected by MoneySuperMarket, the average cost of home insurance in 2023 is £216. This is £29 cheaper than taking out individual policies for buildings and contents insurance.
What does buildings insurance cover?
Buildings insurance policies vary from one provider to the next. However, in general, they cover your home for the following:
- Fire/Smoke damage
- Storm damage
- Flood damage
- Falling trees
- Natural disasters
- Water damage from leaking pipes
- Oil leaking from heating systems
What does contents insurance cover?
While buildings insurance protects you against damage to the structure of your property, contents insurance looks after the belongings inside.
Again, policies vary depending on the insurance company. Still, most contents insurance will cover you for the damage or theft of your furniture, TVs, laptops, tablets, and other personal items, usually up to a stated value.
It’s important to note that “accidental damage cover” can be an additional cost. For example, fire or flood damage to your TV might be covered, but your toddler using your flatscreen for target practice might not.
Always check your policy’s small print, and don’t assume everything is included.
What’s not covered by home insurance?
Most insurers won’t cover general wear and tear, frost damage, leaking gutters, and certain pests (although pest control can usually be included as part of home emergency cover).
You may also find that if you leave your home unattended for a certain period of time (usually 30 or 60 days), you forfeit your right to claim for any loss or damage.
Most home insurance policies will have a list of exclusions, or things not covered by the policy, so always double-check what is and isn’t covered before making a claim.
How much has home insurance gone up in 2023?
According to MoneySuperMarket, the average cost of home insurance has increased by £76 over the past two years (£140 in 2021 vs £216 in 2023).
Why have home insurance premiums increased?
There are two primary reasons why home insurance premiums have been creeping up in recent years.
- The weather: Climate change has made the UK weather far more unpredictable, and many homes weren’t built to withstand such extreme temperatures (both hot and cold). These heat waves and cold snaps have resulted in more weather damage, with cracks, leaks, and subsidence becoming more common. Prices have increased to reflect the risk of these weather-related claims.
- Post-pandemic inflation: Inflation surged during and after the Covid-19 pandemic. This means the cost of materials and labour have soared, making repairs more expensive. Again, insurers have put their prices up to make sure they can cover these costs should you need to claim.
What factors affect the price of home insurance?
There are several factors that, when combined, will impact how much you pay for home insurance. These include:
1. Your age
Generally speaking, the older you are, the less of a risk you’ll appear to an insurer. This is because older homeowners are typically:
- More security conscious, taking extra steps to guard their home and contents against theft
- Home more often, so less of a target for burglary and able to spot and stop issues, such as leaks, faster
- More financially secure and able to keep their home properly maintained
With this in mind, you may find that your home insurance premiums decrease as you age.
2. Your property size and type
The other main factor regarding the cost of home insurance is the size of your property. As a rule of thumb, as the number of bedrooms increases, so does the price.
Essentially, the bigger your property, the more it will cost to rebuild, should the worst happen.
But it’s not just the size that matters. The type of property will also be taken into consideration. Houses will cost more to cover than bungalows, while flats can also be more expensive to insure due to the risk posed by neighbours in close proximity (for example, your upstairs neighbour’s pipes might burst, causing damage to your property).
And if your home is built using any unusual materials (such as a thatched roof, concrete, or cladding on a high-rise apartment), this could make your premiums more expensive due to potentially high repair costs or a higher risk of damage.
3. Your postcode
Home insurance can sometimes be a postcode lottery. As is often the case, some parts of the UK are more expensive than others.
Depending on your location, you might find that your home is at greater risk of flooding, or you may live in an area with higher-than-average crime stats.
These additional risks will be reflected in the price you pay for home insurance coverage.
4. Whether you pay monthly or yearly
When you pay for home insurance monthly, interest will be added to your monthly instalments. This will drive the overall price up. That’s why it’s often cheaper to make a one-off annual payment.
5. Whether you’ve made a claim before
If you’ve had to make a claim on your home insurance, you may find that the price goes up when you next renew your policy. This is because people who’ve already made a claim are statistically more likely to make another.
This will also depend on the type of claim you’ve made. A one-off claim for something small might not push the price up by much — but a claim connected to a larger, ongoing issue (such as flood damage) could result in a higher premium.
How to get cheaper home insurance
Here are three simple tips to help keep your home insurance costs down:
- Speak to an ‘advised’ insurance broker who can help you to understand what cover you actually need. Home insurance is a complex product with multiple options that can be included or excluded according to your personal circumstances. Every home is different, so speaking to an insurance broker can really help you to understand what cover is right for you, meaning you only pay for what you need. Here at Howden, our friendly team is authorised to offer advice, and it might surprise you to learn that not all insurance providers have the permission to do this, so make sure you choose your insurance broker carefully!
- Pay annually instead of monthly. As we mentioned earlier, when you pay monthly, you’ll pay interest on top of your instalment, which drives the price up. If you can afford to pay a one-off lump sum yearly, it should save you money in the long run.
3. Combine buildings and contents insurance into one policy. Instead of buying individual policies, combining them into one can often be cheaper. Doing so also makes it easier to claim for something that has damaged both your property and your contents (for example, flood or fire damage).
In summary: How much is house insurance on average?
To recap, the average price for home insurance has increased over the past few years, from £140 to £216, according to MoneySuperMarket.
However, there are ways to bring the cost of your home insurance down. By speaking to an advised broker, combining your policies, and paying annually, you could beat the average price and save a lot of money.
Here at Howden, 51% of our new home insurance clients saved money — with an average saving of £149 between August 2022 and January 2023!