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Cost of home insurance

How much does home insurance cost?

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Written by  David McDermottroe
8 min read
Updated: 01 Feb 2024

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

Understanding home insurance: Costs, coverage, and value

Navigating the world of home insurance can be a complex task, with various factors influencing the cost and level of coverage you need. Whether you're a first-time buyer or a seasoned homeowner, understanding the ins and outs of buildings and contents insurance is crucial for protecting your property and possessions. In this article, we'll explore the costs associated with home insurance, the reasons behind premium increases, and how to determine the value of your home and contents for insurance purposes.

The front of a cottage

How much does house insurance cost?

The cost of combined home insurance is not a one-size-fits-all figure. It varies across the UK, and several factors come into play when determining your premium. According to the ABI's Home Insurance Premium Tracker, the average price for combined buildings and contents insurance has seen an increase, albeit at a rate below inflation over the past year. Insurers paid out a substantial £2.5 billion in 2022, marking a 6% rise from the previous year. This data underscores the importance of having adequate insurance to handle unexpected events.

The amount you pay for home insurance is influenced by:

  • The location of your property

  • The size of your home

  • Whether you reside in a house or a flat

  • The value of your personal belongings

To secure the best insurance deal, it's essential to have an accurate assessment of your home's value and the worth of its contents. Overestimating these figures can lead to unnecessary overpayment, while underestimating could leave you vulnerable and underprotected when you need to make a claim. It's a delicate balance that requires careful consideration.

*Please note that the data provided here is accurate as of May 2023.

Why are home insurance premiums increasing?

Several factors contribute to the rising cost of home insurance premiums in the UK. These include:

  • Inflation, which impacts repair and rebuilding costs

  • Extreme weather events that cause significant property damage

  • The increasing cost of building materials

  • A rise in the number of insurance claims, partly due to extreme weather and fraudulent activities

Given these factors, it's reasonable to anticipate that home insurance premiums will likely continue to trend upwards in the foreseeable future.

What affects the cost of buildings home insurance?

When it comes to buildings insurance, several elements affect the premium:

  • The location of your property

  • The floor space of your home

  • The age and type of the property

Insurers place significant emphasis on the rebuild value of your home, which is the cost to reconstruct the property if it were completely destroyed. This figure is typically lower than the market value but should encompass all labor and material costs. Homeowners must keep their insurers informed about any alterations that could affect the rebuild value, such as adding an extension.

What affects the cost of contents home insurance cover?

Contents insurance is designed to protect the movable items within your home. This includes:

  • Carpets and curtains

  • Electrical appliances

  • Furniture

For high-value items like bikes, gadgets, and jewellery that are worth more than approximately £300, it's crucial to list them separately on your policy. Other belongings can be included in the total coverage amount.

Should I get separate policies for home insurance?

The necessity for separate buildings and contents insurance policies varies from person to person. For instance, if you own a flat, the buildings cover might already be included in your management charges. It's beneficial to compare the cost and coverage of combined policies against separate ones. While insurers often offer discounts for bundled policies, those with larger homes or extensive valuables may find that separate policies are more advantageous.

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

For insurance purposes, having accurate valuations of your home's rebuild costs and the contents within is essential. This ensures you're not overpaying for your insurance or finding yourself underinsured when it's time to make a claim.

How to calculate home buildings insurance?

To determine the rebuild value of your home, you have a couple of options:

  • Engage the services of a residential property surveyor

  • Utilise the MoneySuperMarket comparison tool, which provides estimates based on the information you supply and data from the Building Cost Information Service (BCIS)

How to calculate home contents insurance?

When calculating the value of your home contents for insurance purposes, you should:

  • Create an inventory of items room by room

  • Perform online searches or obtain expert valuations for high-value items

The sum of all items represents the coverage amount you need to be fully protected. With this figure in hand, you can quickly and easily compare quotes from over 55 insurers using MoneySuperMarket to find a suitable deal.

How to get cheaper house insurance?

If you're looking to reduce your home insurance costs, consider the following tips:

  • Utilise comparison tools to discover deals tailored to your needs

  • Opt for a higher excess to lower your premiums, but ensure it remains affordable

  • Implement home improvements to minimise the risk of damage

  • Consider bundling policies for potential savings

Remember, the cost of combined home insurance fluctuates across the country. By staying informed and proactive, you can navigate the complexities of home insurance and secure a policy that offers peace of mind without breaking the bank. Being well-informed about the factors affecting your premiums and the value of your property and possessions can lead to significant savings and adequate protection.

Whether you opt for a combined policy or separate buildings and contents insurance, the key is to ensure that you're not over or under-insured. With the right approach and tools at your disposal, you can find a home insurance policy that fits your needs and budget.

Kate Hughes
Kate Hughes
Money & Savings Expert

Our expert says

As a nation, we are truly awful at working out how much it would cost to replace our stuff – typically underestimating the value of our items by a significant margin. I always recommend the room-by-room approach, and don’t forget the items you wouldn’t automatically think about, especially carpets and curtains. Do you calculations thoroughly – you may be shocked at the true value of your contents.

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