Households facing a 32% rise in home insurance

Home insurance premiums rose by 32% in the last four months of 2023 when compared with the same period the year before.

According to data from comparison website Compare the Market, premiums increased by £47 on average – rising from £146 in the last quarter of 2022 to £193.

Several regions – East Anglia (34%), Greater London (33%), Southeast England (33%), Southwest England (34%) and Wales (33%) – all experienced an increase of around a third in their home insurance.

However, it was Northern Ireland that saw the greatest annual increase with prices surging by 47%, taking the average premium to around £340.

Northeast England emerged as the most affordable region for home insurance in the last quarter of 2023, with residents paying an average of £157. This region also experienced the smallest annual increase of 26%.

Households living close to tall trees paid more for their premiums (£236), compared to those located away from leafy areas (£191).

And the type of roof you have on your property also made a different to the price of premiums.

There were increases across the board for houses with common roof materials, including asphalt (27%), concreate (28%), stale (33%) and tile (32%).

However, thatch roofs experienced the greatest increase, with prices rising by 56% from £1,272 in 2022 to £1,985 at the end of last year.

Helen Pipps, director at Compare the Market, said: “Home insurance premiums have increased across the country in the past year. Prices may have been affected by high inflation driving up the cost of building materials, as well as an increase in home insurance payouts.

“The threat of turbulent weather also appears to have impacted premiums, as seen by the growing price gap between homes located near tall trees in comparison to those not.”

What is home insurance?

Home insurance protects your home and its belongings. It can cover the cost of repairing or rebuilding your home if it’s damaged by things like fire, storm, or flood. And it can cover the cost of replacing things in your home if they’re stolen, or repairing or replacing them if they’re damaged.

Do you need home insurance if you’re a tenant?

You don’t need buildings insurance if you rent, but contents insurance is sensible – depending on your belongings and circumstances. Your landlord is responsible for repairs to the structure of your home, but they won’t usually cover your own belongings.

Contents insurance covers your personal belongings against loss, theft and damage and usually includes things like furniture, electricals, clothes, jewellery, shoes or other household items like bedding and kitchen gadgets.

Do you need contents insurance if you’re renting a room in a shared house?

Contents insurance is optional but could be a wise choice if you have expensive items, such as electrical devises, that you might struggle to replace. To get cover, most insurers will require you to have a lock on your bedroom door.

Alternatively, if you have a good and longstanding relationship with the people you share with, you could split the cost of a joint policy for the whole property. But be aware anyone named could make a claim, which could make your insurance more expensive in the future.

Here's some ways to reduce your home or content insurance:

Shop around

Prices vary from provider to provider so it’s always wise to shop around when you’re looking to get the best deal. There’s lots of price comparison websites that’ll do the hard work for you such as Compare the Market, MoneySuperMarket, Confused.com and Go.Compare.

Combine building and content insurance

Buying building and contents insurance as one policy is a great way of combing two separate sections of your home insurance together.

Buildings insurance covers the bricks and mortar of your home and contents insurance covers your personal belongings.

Buying them combined means that you’ll only have one renewal date to remember. And it usually works out cheaper with most insurers offering discounts if you buy the policies combined with them.  

Secure your home

You can reduce your home insurance premium by making your home as secure as possible. As a minimum, you’ll be expected to have a deadlock fitted to front doors and many insurance companies will insist on double-sided locks on other doors and windows before they’ll insure a property.

You can reduce premiums further by installing other security measures such as a burglar alarm or CCTV cameras. If you have valuable jewellery listed on your contents policy, keeping them in a safe will help to lower your premium. You could also look to join the local Neighbourhood Watch scheme, as some insurers offer premium reductions to those who are members.

Don’t over-insure

Your insurer might offer additional cover, such as protection against accident damage, on top of your basic policy. However, your standard policy might cover everything you need so you don’t need to pay for unnecessary extras.

Check your quotes carefully and compare what each policy is offering. If you don’t need it, ask for it to be removed to reduce the price of the premium.

Opt for a higher excess

Home insurance claims are usually much higher than others and therefore require a higher compulsory excess amount than say something like car or holiday insurance.

Compulsory excesses are based on your personal circumstances and the likelihood of you making a claim. I.e., if your home is at risk of damage from tall trees or flooding, your excess will be higher as there is a greater risk of an expensive claim.

Your insurer may reduce the price of your premium if you offer to pay a higher excess as - in their eyes - you’re offering to shoulder a greater proportion of any future claim and therefore lowering their financial loss.

Pay your premium in one go

Paying by direct debit and spreading the cost of your premium over 12 months is classed as a loan. It will ultimately cost you more, with some providers charging APR at up to 40%. And it could also impact your credit score.

If you do choose to pay monthly, make sure you’re on the electoral register as some insurance companies use this when credit checking for a direct debit. If your details can’t be found, your provider may charge an additional fee or increase the premium on offer to you.

If you can afford to, it’s always best to pay your home insurance annually as that is how you’ll get the cheapest deal.

Maintain your no claims discount

Some insurers allow you to protect your no claims discount (NCD) after you’ve built it up - usually over a five-year period.

You’ll need to pay an extra premium for this but in the long run it can work out cheaper to safeguard you no claims record.

You can also keep your NCD if you choose to move to a different insurer, but you’ll need to provide proof which can usually be found on your renewal letter from your old insurer.

Avoid double-insuring your gadgets

If you have phone insurance with your mobile provider or warranty over for your electrical devises that also covers fire and theft, then remove these items from your home insurance. Always try to claim for electrical gadgets on their specific polices rather than home insurance as this will protect your no claim discount and keep your home insurance premium down.

Remove anything you no longer own

If you’re renewing your policy with your current provider, review what you’ve previous listed on it. There could be electricals, bikes or jewellery listed over the years that you’ve sold or no longer own. Taking them off the policy might reduce your premium further.

Choose carefully how you describe your job

Some careers are deemed more high risk than others by insurers. These jobs tend to involve working from home, having regular visitors to the property or if you go out at night and leave the property unattended which would make it more vulnerable to burglars.

Don’t lie about what you do for a living as this can invalidate your insurance but it’s worth seeing if you can reduce your premium by using a different job title. I.e., a journalist could be a writer, while a researcher could be an analyst.

It’s a bit of trial and error but it’s definitely worth giving it a go to see if you can make a saving.