How much is home insurance?

Looking to cut your home insurance costs? Find out how much you should be paying and how you can bring those pesky premiums down.

Your home is your castle and probably the most expensive single asset you own. Unless you’re a billionaire with a private jet and island.

So home insurance can offer vital protection for your property and its contents from risks such as theft, fire and flood.

Yet it can be hard to work out whether you’re getting good value for money when it comes to home insurance. According to the AA British Insurance Premium Index the average home and contents policy costs about £162 a year.

However, home insurance prices vary from person to person. What you pay could be drastically different to what your neighbour forks out each month or year.

In this guide you can find out what factors affect your premiums. Plus we offer tips on slashing your home insurance costs too.

What influences the cost of home insurance?

The cost of your policy may differ based on the type and level of cover you require, the occupants, as well as the age, size and location of your house.

The occupants

You and the other people who live in the property will have a sizeable impact on the cost of your home insurance. Here’s why:

  • Your claims history. If you’ve made several claims over the past few years you’re bound to pay more in home insurance.
  • Your profession. People in certain professions will be seen as higher risk. Someone in the military who is away from home for long stints will find it harder to get affordable insurance, for example.
  • Lifestyle. Smoking can raise the cost of your premiums, as your home will be at higher risk of having a fire.

The home

  • Address. Insurers will use the location of your home as one main factor when calculating your costs. If your home is in an area with a high crime rate or a high flood risk, you’ll pay more.
  • Building materials. If your home has wood features such as timber frames you will probably pay more in insurance, as there’s an increased risk of fire damaging the property.

Security features. Fit a security device such as a burglar alarm and keep your home securely locked and an insurer may decide to cut your premiums as a result.

Your level of cover

When it comes to buying home insurance, you’ll have to decide whether you want one of the following three options:

  1. Building cover. This protects the bricks and mortar of your property.
  2. Contents cover. This protects your personal possessions and any furnishings and fixtures in your home.
  3. A combination of the two. Will protect both your building and its contents.

Ultimately, the more expensive your home and the more pricey its contents, the more you’ll pay in insurance. If you want home and contents insurance though, it is generally cheaper to buy a combined policy from a single insurance company.

More ways to save on home insurance

There are several ways you can lower your insurance premiums including:

  • Only pay for the cover you need. Weigh up your options before committing. If you only rent your property then you’ll only need contents insurance, for example.
  • Get an accurate rebuild estimate. It’s crucial you give an accurate evaluation of your home and contents when taking out insurance. Overestimating this can lead to unnecessarily high rates. You can avoid doing this by using a commissioned survey’s valuation or the Association of British Insurers’ (ABI) calculator.
  • Try to pay annually. Avoid paying for home insurance in monthly premiums as insurers tend to charge higher rates than if you were to pay in a lump sum each year.
  • Take on a higher excess. An excess is the amount you have to pay towards a claim before the insurer starts helping out. Voluntarily agreeing to a higher excess can slash your premiums.
  • Never auto-renew. Insurance companies often don’t reward loyalty with lower prices, so it’s crucial you shop around a few weeks before your policy is due to roll over. You might find a better deal
  • Build a no claims discount. Keep your home secure and in good shape and hopefully you won’t have to make a claim for a few years or more. This will lower your premiums.
  • Install alarms. Fitting burglar and smoke alarms in your property can cut insurance costs, but make sure they’re approved models before buying.

Frequently asked questions

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