What is the average cost of home insurance?

Last updated: 31 January, 2019

The average home insurance cost in the UK is now £163.38 (for a combined buildings and contents policy).

That is according to the AA’s latest British Insurance Premium Index, which included data from the final quarter of 2018.

The average cost of £163.38 per year represents a 3.8% increase on the previous year, but still offers incredible value for money – especially when you consider the average value of house contents in the UK now stands at £35,000. An average house insurance cost of £3 per week to cover your contents is just good financial sense.

Plus, depending on your circumstances you could find a deal that is even cheaper than that.

Home insurance deals

Get a free quote and save money on home insurance with Bobatoo

Get a quote

How much is buildings insurance?

The average premium price for a buildings insurance policy is now £119.22 per year according to the AA’s data.

That’s an increase of 0.7% over the past year.

If you are interested in a building’s only home insurance policy, find out more here: Buildings Insurance

How much is contents insurance?

For contents insurance, the average cost per year is £59.77 – which represents a drop of 0.7% compared with last year.

If you want to find out more about contents insurance, go to: Contents Insurance

The AA’s average home insurance premium costs are calculated from quotes from approximately 70 insurance companies and brokers.

As well as the AA, the Association of British Insurers (ABI) have also released data showing the average house insurance cost is currently £141.00 per year.

The ABI’s data is based on information taken from insurance companies that are registered members – which accounts for 90% of the insurance market and is therefore a reliable indicator regarding the average cost for combined home insurance as well as for separate buildings insurance and contents insurance.

The general trend over the past few years has been for a gradual increase in the cost of home insurance – which has been blamed on the increase on Insurance Premium Tax as well as the rising cost of the gadgets and other contents in our homes.

The below graph shows the gradual increase in premiums for combined home insurance policies:

Cost of home insurance premiums graph

Source: The AA

Last year the ABI revealed new research that showed the average value of home contents in the UK is now £35,000.

The most shocking finding in the research was that as many as 7.5 million UK households do not have any contents insurance in place – which means that £266 billion worth of valuables are not insured against risks such as theft, fire, flooding and accidental damage.

Mark Shepherd, Head of Property at the ABI, said:

“The value of possessions owned by the average household will come as a shock to many. But with the list of ‘must haves’, such as electrical gadgets, ever expanding it can be easy to underestimate the worth of your contents.

“These figures further highlight what can be at stake for many who have no contents insurance. With a wide variety of policies available, including no-frills policies tailored to people on limited budgets, insuring your possessions can mean that if the worst happens you are not left counting the cost for years to come.”

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:

Home insurance deals

Get a free quote and save money on home insurance with Bobatoo

Get a quote