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Cost of home insurance

How much does home insurance cost?

David McDermottroe
Written by  David McDermottroe
8 min read
Updated: 30 May 2024

Find out how to calculate your home insurance cost before comparing quotes with MoneySuperMarket

In the current economic landscape, where inflation seems to be an unwelcome guest at every table, homeowners across the UK are feeling the pinch in an area critical to their peace of mind: home insurance.

With premiums on the rise, it's more important than ever to understand your policy, ensuring that you're not only getting the best value for your money but also the right level of protection for your property and possessions.

How much does house insurance cost?

When it comes to home insurance, one size certainly does not fit all. Costs can vary significantly across the UK, influenced by a myriad of factors.

According to the ABI's Home Insurance Premium Tracker, there's been an average uptick in the price for combined buildings and contents insurance, with a notable 6% rise from the previous year, amounting to insurers paying out a staggering £2.5 billion in 2022.

Several elements come into play when determining insurance costs:

  • Location: where your property is situated can have a substantial impact on premiums.

  • Home size: larger homes typically mean higher insurance costs

  • Type of residence: whether you live in a flat, a detached house, or a semi-detached home can affect your premium

  • Personal belongings: the value of your possessions inside the home also plays a crucial role

It's vital to have an accurate valuation of both your home and contents to avoid the pitfalls of overpaying or, worse, being underinsured when you need to make a claim.

The front of a cottage

Why are home insurance premiums increasing?

The hike in home insurance premiums isn't arbitrary. It's a reflection of several converging factors:

  • Inflation: as the cost of living climbs, so do the costs associated with repairs and replacements

  • Extreme weather: the UK has seen its fair share of weather-related claims, driving up premiums.

  • Building material costs: with higher prices for materials, the cost of rebuilding and repairs increases.

  • Claim Frequency: An increase in the number of claims naturally leads to higher premiums, including those from fraudulent activities.

Experts anticipate that premiums will continue their upward trajectory, making it all the more crucial for homeowners to stay informed and proactive.

What affects the cost of buildings home insurance?

When insurers calculate the premiums for buildings insurance, they consider:

  • Property location: high-risk areas for flooding or theft may see higher premiums.

  • Home floor space: larger homes generally mean higher rebuild costs.

  • Age and type of property: older properties or those with unique features may cost more to insure.

  • Rebuild value: this is the cornerstone of buildings insurance, encompassing all potential labor and material costs. Homeowners should always keep their insurers updated on any alterations that could influence this value.

What affects the cost of contents home insurance cover?

Contents insurance is there to protect the movable items within your home, such as:

  • Carpets

  • Appliances

  • Furniture

For high-value items—think bicycles, the latest tech gadgets, or precious jewellery—it's wise to list them separately on your policy if they're worth around £300 or more.

Should I get separate policies for home insurance?

The decision to split buildings and contents insurance into separate policies is a personal one and depends on your specific circumstances.

For instance, if you own a flat, the buildings cover might already be included in your management charges. It's worth comparing the costs and coverage of combined and separate policies, as sometimes having them apart can be more beneficial.

Do I need to know what my home and contents are worth?

Absolutely. Accurate valuations are the bedrock of appropriate insurance coverage. Underestimating could leave you in a bind during a claim, while overestimating means you're likely paying more than you need to.

How to calculate home buildings insurance?

Determining the rebuild value of your home can be done through a professional residential property surveyor or by using tools like the MoneySuperMarket comparison tool, which provides estimates based on the information you provide and BCIS data.

How to calculate home contents insurance?

To calculate the coverage amount needed for your contents insurance, take a systematic approach:

  • Inventory: go through each room and list all items

  • Valuations: obtain professional valuations for high-value items to ensure they're adequately covered

How to get cheaper house insurance?

In the quest for more affordable home insurance, there are several strategies to consider:

  • Comparison tools: use platforms like MoneySuperMarket to compare quotes and find the best price for your budget.

  • Higher excess: opting for a higher voluntary excess can lower your premium, but ensure the excess remains affordable

  • Home improvements: certain upgrades can make your home more secure and potentially reduce insurance costs

  • Policy bundling: Combining policies might lead to discounts

Being well-informed about the factors that influence your premiums and the actual value of your property can lead to significant savings and ensure that you have adequate protection in place.

Finding the right home insurance policy doesn't have to be a daunting task. With the right approach and the help of comparison tools, you can navigate the complexities of coverage, costs, and value, securing a policy that meets your needs and fits your budget, even in the face of rising inflation.

Remember, the best policy is one that offers peace of mind, knowing that your home and possessions are well-protected.

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