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Average Cost of Home Insurance 2020

Cheap Home Insurance in Your Area

Quickly compare up to 49 UK insurance providers. Only one form to fill out.

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Whether you're a new homeowner or it's time to renew your existing home insurance policy, what should you expect to pay for combined buildings and contents insurance? We've gathered quotes from a dozen of the best UK home insurance companies in order to get an idea of how much you'll pay for home insurance depending on factors like excess and coverage.

Below, we detail average costs and the range of likely prices you might find as you begin to shop, both for basic and more premium policies. Use this information to help you gauge what type of policy fits in your budget and whether a quote is too good to be true, or perhaps more than you need. For information on costs of extras like family legal, accidental damage, personal belongings, bikes and home emergency, see our article on average costs of home insurance extras.

Average Cost of Home Insurance

The average premium actually paid in the UK for home buildings and contents insurance was £307 in 2018—but you might pay more or less in the market today, depending on the value of your home, the excess, your no claims bonus, the features you want in a policy and even your claims history.

For example, our research showed that the average cheap home insurance quote for the typical British home with a £200,000 replacement cost is £294 a year—this reflects the 5 cheapest quotes available including £50,000 of contents cover and accidental damage, legal and home emergency cover.

Cost of Home Insurance for Average UK Home (£200k rebuild cost)Average of Cheapest 5 Quotes
No accidental damage£240
With accidental damage£276
With Accidental Damage, Legal and Home Emergency£294
chart showing average home insurance premiums in the UK
Buildings & contents insurance cost for the average British home

However, the range of annual premiums in our study was quite large, from as little as £163 per year up to £595 per year depending on the coverage and features we selected, and other differences like excess and no claims bonus. Plus the brand and tier can make a difference, with quotes for premium cover from some brands easily costing 40% to 50% more. Let's see how these factors affect premiums.

Rebuild Cost

A big factor that determines the cost of your home buildings insurance is the rebuild cost of your home—the average cost to rebuild a house is around £200,000 for a 1,400 square foot 3-bed home, but your rebuild cost will depend on many factors such as the size of your home and where you live. The following chart can give you an idea of how the rebuild cost can affect your premium. Prices reflect the 5 cheapest prices including £50,000 of contents cover, accidental damage, legal and home emergency.

Buildings Rebuild Cover AmountAverage Cost of Combined Home Insurance per Year
£120,000£276
£200,000£294
£500,000£330
£1,000,000£364
chart showing average home insurance premium by buildings cover amount
Buildings & contents insurance premiums rise with buildings cover limit

Buildings cover alone usually costs in the region of £65 less than a combined home buildings & contents policy.

Extras

Cheaper policies tend to be stripped of "extra" coverages like legal, home emergency and accidental damage, while more expensive/higher tier policies might include these features. In many cases a higher tier policy that includes the features you want ends up cheaper than adding extras onto a cheaper policy. For example, adding all three can add over £110 to your premium. According to our study, here's how much these features usually cost when you add them on:

Estimated Cost of Home Insurance Add Ons
Legal Assistance£24.08
Home Emergency£41.07
Accidental Damage£45.56
Total£110.71

How Excess Affects Home Insurance Premiums

Like all insurance policies, your home insurance premium can often be reduced by electing to pay a higher excess, and vice versa. The excess is the amount you pay towards any claim before the insurer pays any reimbursement. The more you are willing to pay towards a claim (the excess), the lower your insurance premium in most cases. While you may be enticed by a higher excess/lower premium combination, carefully consider the financial impact of a higher excess should you ever need to claim on your policy—you'll need to be able to cover the excess.

Premiums Drop When You Pay a Higher Excess

ExcessAverage Buildings & Contents Insurance Premium (Annual)
£100£300
£200£262
£500£226
£1,000£148

What is a Compulsory Excess?

An excess is an amount you must pay towards any claim—and a compulsory excess is basically the minimum excess that an insurance company requires. A compulsory excess is non negotiable. Not all insurers apply a compulsory excess; some have £0 compulsory excess, letting you choose the entire excess amount through your selection of voluntary excess. Whether or not you have a compulsory excess, you can typically add a voluntary excess amount on top of the compulsory excess.

What is a Voluntary Excess?

As its name implies, the voluntary excess is an amount that you volunteer to add on top of the compulsory excess. Selecting a voluntary excess (thereby raising the total excess) should lower the premium you pay, but keep in mind that your coverage is essentially reduced if you need to claim. You'll be required to pay both the compulsory and voluntary excess before the insurer pays their share of a claim.

chart showing average home insurance premium by excess
How Excess Affects Home Insurance Premiums

How Does No Claims Bonus Affect Home Insurance Premiums?

While you'll hear that no claims discounts can reach 50% by year 5, what are average NCDs in the market? According to our research of the cheapest home insurance policies, the average no claims discount on new policies is around 15% for 3 years NCD, increasing to 22% for 5 years NCD. After 5 years, you get less and less benefit per additional year of no claims—for example the NCD only increased 0.5% per year between years 5 and 9. However, NCDs can vary significantly from company to company so your experience may be different.

Average No Claims Discount on Cheap Home Insurance
3 years-15%
5 years-22%
9 years-24%

How Much Does House Insurance Cost a Month?

In the UK, the average monthly payment for buildings & contents insurance is around £28.87 per month; monthly payments end up costing around 9% more than paying upfront.

Why? Because when you pay monthly you're essentially borrowing money so you pay the premium AND an interest charge each month. For example, a £300 annual policy would cost £28.21 per month based on a 22.9% APR. Each month, you'd pay around £25 towards the premium and £3.21 in interest payments (with interest charges totaling £38.5 for the year).

If you have the cash, we recommend paying upfront to save yourself the interest payments. For more information on this topic, please read our article Should I Pay my Home Insurance Annually or Monthly?

FAQs

The average cost of home insurance in the UK is roughly £300 for buildings and contents cover. Rates vary depending on factors like the level of cover, your claims history and your post code.
The average cost of building insurance alone (excluding contents cover) is £258 a year in the UK, but will vary by factors such as rebuild value.
In the UK, home buildings and contents insurance costs around £29 a month, which costs around 9% more than if you pay upfront.
A home insurance premium is the amount you pay your insurance provider to cover your home and/or belongings against fire, theft and/or damage. Home insurance premiums reflect the amount of risk perceived by your insurance company and will depend on factors like the replacement cost of your home and belongings, your claims history and even your post code.
Home insurance prices rose just over 1% in 2018, according to the latest public data from the ABI. If your insurance renewal is too high, compare home insurance quotes from up to 49 providers from our partner QuoteZone.
Home insurance premiums can increase for a variety of reasons such as if you're more at risk of burglary due to crime trends in your local area or if you've made a claim. Also, home insurance premiums can rise across the board if a company needs to pay higher-than-expected claims, for instance due to extreme weather like flooding.
Yes, your home insurance premium can increase after you claim, especially if the claim makes you look "riskier". For example, if your home flooded or was burgled last year, you're more likely to claim for flooding or burglary the next year. (Thieves often return, knowing you will have replaced what they stole with new!) Plus you can lose your No Claims Discount if it wasn't protected, which alone can cause your premiums to rise by 50% or more.

Sources

ABI

Cheap Home Insurance in Your Area

Quickly compare over 3 dozen UK insurance providers. Only one form to fill out.

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