How much does home insurance cost?

10 min Read Published: 15 Jul 2022

How much does home insurance cost?

If you own or rent a property you should ensure you are suitably protected with a home insurance policy. In this article, we explain what home insurance covers and how much house insurance costs for different properties. We also share how much home insurance you need and tips on how to save money on your home insurance policy.

What is home insurance?

Home insurance is an insurance policy designed to protect your home and its belongings against loss or damage. There are two main types of home insurance policy, buildings insurance and contents insurance. Buildings insurance is designed to protect your property against structural damage and will cover the cost to rebuild your property. Contents insurance is designed to protect your property inside your home including furniture and valuables. Home insurance will cover against damage caused by theft, fire or flooding. You may also be able to get cover for damage caused by storms or burst pipes. For more information on the different types of home insurance and what it covers read our articles, 'What is home insurance?' and 'What are the different types of home insurance?'

How much is home insurance?

How much you will pay for your home insurance policy will vary depending on numerous factors. According to data collected by comparison website GoCompare between January and March 2021, the average annual cost of a combined buildings and contents insurance policy was £174.63. If you were to purchase a separate buildings or contents insurance policy it is likely to cost an average of £121 for buildings cover and £78 for contents insurance, according to GoCompare's data.

What affects the cost of home insurance?

How much you pay for your home insurance policy depends on a number of factors including:

  • Where you live
  • The policy holders age
  • Your property size
  • The type of property
  • How secure your property is
  • How much you have chosen to insure e.g the rebuild cost of the property and the amount to insure possessions inside the property

Below we highlight the difference in cost of a number of home insurance policies depending on the property region, size, type and the policy holder's age.

Does your property location affect the cost of home insurance?

Where you live in the UK can affect the cost of your home insurance policy as certain areas may be at more risk of flooding or there may be higher crime rates or claims data in certain areas. In the below comparison table we compare the annual cost of combined home insurance policies in different areas taken out with GoCompare between January and March 2021.

Region Annual cost of combined buildings and contents insurance
Greater London £246.58
Northern Ireland £206.87
South East £198.83
Scotland £175.65
South West £167.71
East Midlands £165.67
West Midlands £163.23
Wales £162.55
North West £161.57
North East £159.61

*Data collected by GoCompare between January - March 21

Does your property size affect the cost of home insurance?

You can expect your home insurance policy to be more expensive if you have a bigger house as it is likely to cost more to rebuild the property and there is likely to be a larger number of items within the property to insure. The average annual cost of a combined home insurance policy for a 2 bedroom property is £134 compared to £213 for a 4 bedroom property, according to data from GoCompare.

Does your property type affect the cost of home insurance?

The type of property you are insuring will affect the cost of your home insurance policy as well as the property age. When taking out a home insurance policy the cost to rebuild the property is one of the main factors that will affect the cost of your insurance premium. Additionally, if your home is older or is a listed property the rebuild cost is likely to be significantly more than a modern property, which in turn can make your insurance premium higher.

GoCompare's home insurance policy data from January - March 2021 found that houses on average were more expensive to insure than flats or bungalows with houses averaging £184 a year and flats and bungalows costing £166 and £162 on average, respectively. Listed buildings were also significantly more expensive than non-listed properties. A grade 1 listed property averaged £312 a year while a non-listed building was £179 a year on average.

Does your age affect the cost of home insurance?

Age can affect the cost of your home insurance policy and typically policyholders over the age of 50 are seen to be lower risk than those below the age of 50. This is because older homeowners are statistically less likely to make a claim. This could be because they may be home more often and are more security conscious so may be less susceptible to burglaries. Additionally, older homeowners may also be more financially secure meaning they are able to keep on top of home maintenance and therefore less likely to claim.

Households under the age of 50 pay an average of £160 for their home insurance policy per year compared to £150 for those over the age of 50, according to Consumer Intelligence.

How much home insurance do you need?

Buildings insurance will cover the cost to rebuild your property so you only need to insure the rebuild value and not the value of the property if you were to sell. You can calculate this with the ABI rebuild cost calculator which estimates the rebuild costs of your home. Contents insurance is designed to cover the cost of the possessions inside your home. You will need to calculate the cost of these items and how much it would be to replace them if they were stolen, damaged or destroyed.

How to reduce the cost of home insurance?

If you're due to renew your home insurance policy you can follow the steps below to try and save money on your premium. For more money-saving tips read our article, 'How to save money on your home insurance'.

  • Shop around - comparing quotes with numerous providers allows you to get the best value for money on products.
  • Increase policy excess - increasing your policy excess can reduce the cost of your premium but remember this is the amount payable in the event of a claim.
  • Combine cover - combining a buildings and contents insurance policy may be cheaper than two separate policies.
  • Pay annually - paying your insurance upfront can save money compared to paying your premium monthly. This is because some insurers add an additional premium for paying the insurance monthly as explained in Damien's video.
  • Only insure what you need - over-insuring your property can mean you pay a higher premium than is necessary. Remember that with buildings insurance you are insuring the rebuild cost of your property and not your property's current sale price.

How to buy home insurance

One of the easiest ways to compare and purchase a home insurance policy is via a comparison site. We have partnered with Quotezone* so that you can search and compare cheap quotes from over 40 UK home insurance providers.

Comparing home insurance policies allows you to compare multiple providers at once to get the best deal. However, one thing to consider is that not all comparison sites are whole of market so you may be able to get a better deal elsewhere.

 

 

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