If you own your home, insuring both the building and its contents should be a no-brainer.

Whether your home is damaged by a fire or flood, or you’re the victim of a break-in, a good home insurance policy will ensure you’re not left out of pocket.

Comprehensive home insurance is made up of buildings insurance, which protects the structure of the property, and contents insurance, which protects everything in it from your furniture and appliances to your jewellery, clothes and tech.

Although you can buy policies separately it’s usually cheaper to buy combined cover, but just how much does home insurance cost?

Unfortunately, the cost of home insurance in Britain has soared. According to data from comparison website GoCompare, the average annual cost of home insurance was £213 at the end of 2023 – up from £157 the year before, an increase of 36pc.

Here, Telegraph Money explains the factors that affect the cost of your home insurance, and how to save on your next policy.

The factors that affect the cost of home insurance

How much you pay for your home insurance will depend on a number of factors.

Location

Your postcode will be a key driver in the cost of your home insurance. If you live in a flood-risk area, for example, you will pay more for your cover as you’re more likely to need to make a claim.  

The same goes if you live in an area where property is expensive, or there’s a high crime rate.

Currently, the most expensive place to get home insurance is Northern Ireland, with an average premium of £347 a year, followed by Greater London at £309 and the South East at £237.

Your property

The type of property you live in will also have a big impact on the cost of your home insurance. 

Houses are the most expensive properties to insure with an average premium of £215 a year, according to the GoCompare data. That compares to £204 for bungalows and £199 for flats.

The larger the property, the more it will cost to insure. In addition to higher repair and rebuild costs, they’re likely to hold more contents, too.

The structure and age of your property also make a difference. If, for example, you live in a cottage with a thatched roof or a listed building, home insurance will be more expensive because you will likely need specialist tradespeople for repairs.

The level of cover you choose and the scope of your policy

The level of cover you need will affect the cost of your home insurance. The higher your rebuild cost and the more expensive your possessions, the more you will pay. 

Choosing optional extras – such as legal insurance, bike cover or accidental damage – will bump up your costs, too.

You may also find the cheapest policies don’t offer the most generous cover.

For example, they might have lower single item limits for your valuables, offer less cover for your garden or not offer “new for old” cover for your belongings.

How to get the right level of cover

You won’t want to pay any more than necessary for your home insurance, but it’s important that you don’t skimp on cover either. 

When you buy your policy you will be asked for two very important figures: the rebuild cost of your home and the value of your possessions.

  • Rebuild cost: This is the cost of rebuilding your home from scratch, not its market value. It isn’t an easy figure to calculate yourself so try the handy calculator on the ABI website (note that you’ll need to register to use it).
  • The value of your possessions: This is the value of everything in your home that you would take with you if you moved. You can make a list by going around your home room by room and totting up the value yourself, or you can try an online contents calculator.

You should also think about what else in or around your property is important to you. For example, if you enjoy time in the garden and have spent a lot on plants and furniture, it makes sense to check if your policy offers a decent level of garden cover. 

If you’re accident prone, have children or pale carpets, accidental damage cover could be a wise move.

Money saving tips for home insurance 

While you might not be able to do much about where you live, or the type of property you own, there are still plenty of ways to cut the cost of your home insurance policy.

  • Don’t auto-renew: While the “loyalty penalty” means insurers aren’t allowed to offer preferential deals to new customers, many people still find they can save money by shopping around versus auto-renewing with their existing provider.
  • Pay annually: Paying monthly comes with interest charges, so pay annually if you can.
  • Don’t overestimate values: Calculate your rebuild costs and content values carefully so you don’t pay for cover you don’t need.
  • Keep extras to a minimum: Only pay for optional extras like legal cover or accidental damage if you’re sure you need them.
  • Double-up policies: You can often save money by buying your buildings and contents cover from the same insurer.
  • Increase your voluntary excess: The more you can agree to pay towards a claim, the cheaper your cover will be.
  • Build your no claim discount: Each year you don’t claim, you will earn a bonus that reduces the cost of your home insurance. This means it’s worth thinking twice before making small claims and paying attention to your home security to reduce the risk of a break-in.
  • Choose the right provider: Shopping around will help you cut costs, but it’s important to look at the quality of the cover you are buying and checking it offers the cover you need.

Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.