Annual vs monthly home insurance

Is it more expensive to pay home insurance monthly?

By on

All you need to know about any extra payments on monthly home insurance

Row of houses

When you’re buying home insurance you can choose to pay for it upfront for a whole year or in monthly instalments.

Paying home insurance annually

Paying annually for home insurance is the most common policy type that providers offer. It can be a large upfront payment, but you only need to pay once and not worry until it’s time to renew your policy.

At that point you can choose to shop around for a cheaper home insurance quote that covers your needs.

Paying home insurance monthly

Many providers offer you the choice to pay for home insurance in monthly instalments, typically by Direct Debit. It can help if you need to spread the cost, but the drawback is that you will often pay more overall than if you’d chosen to pay for it all in one go.

This is because, if you pay for your home insurance monthly, your provider is basically lending you the cost of the policy, so will charge interest.

What does paying monthly do to my home insurance?

If you choose to pay for home insurance monthly, it’s also not necessarily the case that you will pay 12 equal instalments over the course of the year.

Often you will be asked to pay an initial deposit – which can be between one months’ payment and the equivalent of up to two months. The remaining amount is then divided by 10 or 11 instalments over the rest of the year.

To pay monthly insurers will perform a credit check on you to see how you’ve managed debt in the past. If you have a low credit score, they may charge you a higher premium to pay monthly.

You can use MoneySuperMarket’s Credit Monitor to check your score for free without affecting it, and to get personalised tips on how to improve it.

Pay monthly versus pay annually

Year built

Annual price

Monthly price (annualised amount)

1901-1910

 £168

 £182

1911-1920

 £155

 £168

1921-1930

 £166

 £181

1931-1940

 £146

 £159

1941-1950

 £135

 £147

1951-1960

 £133

 £145

1961-1970

 £131

 £143

1971-1980

 £133

 £145

1981-1990

 £138

 £151

1991-2000

 £144

 £157

2001-2010

 £150

 £162

2011+

 £133

 £143

Up to 1900

 £176

 £191

Based on MoneySuperMarket enquiries data between May 2019 and April 2020 for combined buildings and contents insurance, accurate at May 2020

What’s the cost of monthly or annual home insurance?

With the average price for combined building and contents insurance standing at £144 across the UK in Q1 2020~, it’s understandable that people may want to spread the cost of this necessary purchase if they can.

As an example, according to MoneySuperMarket data, a combined policy on a house would cost on average £146 if paid in one go. Paying monthly would add £13 to the premium to total £159*.

Similarly, buildings and contents insurance for a property built between 1961 and 1970 would cost £143 over the year if paid in instalments. Paying annually would shave £12 off the total, at £131.

So, you can expect to pay between 7% and 9% more, on average, on buildings and contents insurance, depending on the age and type of property you are looking to insure.

Annual versus monthly home insurance by property type

PropertyType

Annual price

Monthly price (annualised amount)

Bungalow

 £128

 £139

Flat/Apartment

 £151

 £160

House

 £146

 £159

Other

 £298

 £316

Town House

 £135

 £146

Based on MoneySuperMarket enquiries data between May 2019 and April 2020 for combined buildings and contents insurance, accurate at May 2020

How to pay for your home insurance

You will typically pay for monthly home insurance by Direct Debit which your provider will set up when you buy your policy. You can use your bank account or a credit card to make the monthly payments.

Compare monthly and annual home insurance

It’s quick and easy to compare home insurance quotes on MoneySuperMarket, to make sure you get the best deal.

Just pop in a few details about yourself and your home to compare not only the cheapest deals, but claims experience, quality scores and any additional features. You can use our filters to clearly show you what it would cost to pay for a policy annual compared to the cost in monthly instalments.

Once you have found the deal you want you can apply directly to get a new policy.

~MoneySuperMarket data for combined buildings and contents insurance between January 2020 and March 2020

*According to MoneySuperMarket enquiries data between May 2019 and April 2020 for combined buildings and contents insurance, accurate at May 2020 

Did you find this helpful? Why not share this article?

Our top home insurance articles

  

View all articles >

Popular home insurance guides

  

View all guides >