What is the average cost of home insurance?
According to the latest data from the ABI (Association of British Insurers), the average cost of home insurance is currently £297 per year – or £24.75 per month.
That is the average cost for combined buildings and contents insurance.
The average annual premium cost for buildings insurance is £263 per year – or £21.91 per month. For contents insurance, the average cost is £135 per year – or £11.25 per month.
All of these new average UK house insurance costs are from the first quarter of 2017.
The ABI’s report into house insurance costs is based on information taken from insurance companies that are registered members – which accounts for 90% of the insurance market and therefore a reliable indicator regarding the average cost for combined home insurance as well as for separate buildings insurance and contents insurance.
The ABI isn’t the only report to consider though, as a recent AA study came up with different average prices for home insurance. According to the AA – which collates the cheapest premiums quoted by home insurance companies and brokers – the average cost of a home insurance policy is £157.59. For buildings cover, the AA found the average price to be £112.69, and for contents insurance the average price was £61.16.
All of the prices in the AA index are from Q2 of 2017, and they all represent a slight increase from the previous quarter – something the AA put down to the rise in Insurance Premium Tax.
As the two reports use different measures to collect the data, the difference in results is understandable. What it does confirm is that it is always worthwhile to shop around and compare quotes from many different home insurance companies.
How to get cheaper home insurance
As well as the rise in Insurance Premium Tax, other factors are also influencing the rising cost of home insurance – including the weak pound, rebuilding costs and fraud. In such a demanding market, it’s important that you do what you can to get the cheapest deal on home, buildings and content insurance. Below are some factors that can influence the price of home insurance…
What policy do you need? In general terms there are three main types of home insurance: buildings, contents and combined. Combined buildings and contents tend to the most expensive, and is the most common, but separate buildings and contents options exist for a reason – so be sure to check out exactly what level of cover you need before signing up to a policy.
Excess – The level of voluntary excess you opt for on top of any compulsory excess the insurer sets can have a big affect on the price of your insurance. The higher the excess, the lower the premium – but make sure you only set it to a level you can afford. Find out more here: What to do if you can’t afford your excess
Optional extras – These can include devices like tablets and laptops, jewellery or any other valuable items that would require more than the standard £1,000 individual item limit.
Claims history – Just like with car insurance, if you have made a claim on a home insurance policy in the past then you may find you get quoted higher premiums as a result.
Your address – If you live in a high-risk area e.g. high crime rate, flooding etc… then you will likely find that it costs more to get home insurance cover.
The type of property – Insurance companies tend to quote different prices depending on whether you are living in a house, bungalow, town house, flat, studio apartment, bedsit etc…
Size of the property – Usually this is determined by the number of rooms in the property, including living rooms, bedrooms, kitchens and bathrooms.
Is it a listed building? – A Grade 1 or 2 listed building need to be repaired by specialist contractors and can only use certain materials, so as well as costing more to repair they may also be more accessible for thieves. Subsequently, home insurance premiums will cost more.
Home office use – If you work from home then your premium may be more expensive. It’s also worth pointing out that, depending on your type of business, you may not be covered by a standard policy so you could require a specialist business policy. Learn more: Home insurance advice for people who work at home
Building security – Obviously, the more secure your house is the less risky it is to insure – which can led to cheaper home insurance. The type of locks you have on doors and windows, the number of entrances and whether or not you have a burglar alarm are all factors that can influence the cost of insurance. Learn more: Top burglar alarm myths