How much is the average home insurance in the UK?

When taking out home insurance, you need to know you’re getting a good deal. Victor Garret takes a look at the average cost of home insurance in the UK.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

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Home insurance should be considered an essential expense if you own a property. Taking out home insurance generally means you want to protect your home in case of flooding, fires, theft and burst pipes. But how much should home insurance cost? Here’s what you need to know.

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What is home insurance?

Home insurance has two parts: buildings and contents insurance. Simply put, buildings insurance covers the structure of your house, including the roof, walls, floors and other structures like fences, sheds, garages and driveways. Contents insurance covers items in your house, like appliances, furniture, jewellery and electronics.

What’s the average cost of home insurance in the UK?

The average premium for combined buildings and contents insurance is £141. But taking out buildings insurance cover alone will cost you an average of £109.86, while just contents insurance cover averages £61.48.

However, keep in mind that it’s important to read and understand what each of these policies covers. You may realise that combined buildings and contents policies may not cover some things offered under separate buildings and contents policies.

The cost of home insurance has been fluctuating recently. In April, a report from MoneySuperMarket highlighted that the cost of some home insurance premiums actually fell for the third consecutive quarter. This was likely because Covid-19 restrictions meant homeowners spent more time at home, meaning there were fewer burglaries.

Additionally, since people are spending more time at home, they’re able to catch maintenance issues before they cause serious damage. This means fewer claims, making insurance companies profitable and resulting in lower prices. 

Can you own a house without insurance?

You aren’t legally required to take out home insurance cover. However, if you’re taking out a mortgage, the lender is likely to require at least buildings cover.

Taking out contents insurance cover is a prudent move, particularly when there’s a significant risk of damage to your possessions. It could be that your property is located in or close to a flood zone or in a neighbourhood with a high crime rate. 

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What does home insurance typically not cover?

The last thing you want is to encounter a situation in which you’re not covered. The solution is quite simple: take the time to read and understand what your insurance policy covers, including the fine print.

Additionally, it might be important to understand two key phrases:

  • Named perils cover
  • All-risks cover 

Named perils cover lists the risks covered by your home insurance policy. If a particular event isn’t listed, the chances are high it’s not covered. As a result, you might have to pay extra for specific risks to be covered.

All-risks cover protects you from all risks you might encounter. However, look out for a clause that lists the risks not covered. Similarly, you might have to pay extra for these risks to be covered.

Here are some of the common risks that basic home insurance policies don’t cover:

  • Flooding damage caused by external conditions (burst dams, rising rivers, sewer backups and flash floods)
  • Damage to your car when parked at home – this is covered by your comprehensive car insurance policy
  • Earthquake damage
  • Hurricane damage

How can I lower my home insurance cost?

Shopping around is usually the first thing most experts recommend. This helps to ensure you get the most competitive deal. Remember to compare monthly and annual payments. Typically, you could save more by paying annually.

Your insurer will ask questions about your property to help gauge or work out the risks of making a claim. You can bet that the condition of your home will impact the cost of your insurance.

For example, installing a burglar alarm, CCTV and security lights reduces the chances of theft, meaning cheaper home insurance. It might also be prudent to clear trees or branches that could fall onto your house, fire-proof your home and insulate water pipes.

Additionally, try not to over-insure. Get the accurate value of your belongings and consider insuring the cost of rebuilding your property, not its purchase price.  

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