BILL BLOW
Essential bill millions can’t avoid hits record high of nearly £400 a year – five ways to keep costs down
Check out our video above for ways you can cut costs on all types of insurance
AN essential bill paid by millions has hit a record high of almost £400 a year in a blow for households.
The average price of home insurance rose to £396 between April and June, up from £375 at the start of the year, according to new data.
1
The Association of British Insurers (ABI) said the average buildings-only policy was £321, an increase of £23 from £298 at the start of the year.
Meanwhile, the average contents-only premium was £137 between April and June - £5 higher than between January and March.
It means the average cost of a combined policy has increased by a whopping 19% compared to the same period in 2023, in a blow for households.
Combined policies are also the highest they have been since 2017, when a premium would have set you back £406 in between April and June.
Read more on Home Insurance
Home insurance is not a legal requirement but many mortgage lenders insist that you take it out before they approve your home loan.
You can take out buildings insurance, which covers the cost of repairing any damage to the structure of your property, and contents, which covers you in case the contents of your home are damaged, lost or stolen.
You can also buy combined home insurance which includes both buildings and contents cover.
The ABI also revealed today insurers paid out a seven-year high £1.4billion in claims between April and June.
Most read in Money
This is a 5% increase on the first three months of the year when payouts reached £1.3billion.
The ABI said the rise in claims comes following stormy and wet weather.
Cut car insurance costs and save money
It said claims for damage to homes from storms, heavy rain and frozen pipes reached £144million in between April and June.
The trade body said this was the fifth consecutive quarter that weather-related claims have been above £100million.
Louise Clark, policy adviser at the ABI, said the latest figures showed the "devastating impact" adverse weather can have on people's homes.
But Which? called on insurers to stop dragging their feet in paying out for claims, particularly with prices so high.
Sam Richardson, deputy editor of the consumer group, said: "Good quality home insurance is increasingly important - yet customers with these products face some of the lowest claims acceptance rates.
"While some home insurers' prices are going up, research has found that some are prolonging customers' ordeals by failing to deal with claims in an appropriate manner.
How to cut home insurance costs
Renew at the right time
Locking in a new policy at the exact right time can get you the best prices - this is usually 21 days before renewal, according to MoneySavingExpert.com
A couple of days either side of these won't make too much different though, so don't worry if you can't lock a deal at this exact time.
Never auto-renew
Don't wait for your home insurance policy to auto-renew as you will likely end up paying much more than you should.
Instead, shop around beforehand to find the deal best-suited to your needs.
You can use price comparison sites such as MoneySuperMarket, GoCompare and Confused.com.
If your firm offers you a new policy that's much more than what you have found, you can haggle for a cheaper deal.
If your firm refuses to offer you a cheap policy, you can always go with a new company.
Choose a policy that works for you
Make sure the policy you are taking out is actually well-suited to you and you aren't paying for cover you don't need.
Go through the main terms and conditions to check you're happy with everything, and check the provider is regulated by the Financial Conduct Authority (FCA).
Remember too, if you have a claim unfairly rejected, you can escalate it with the Financial Ombudsman.
Don't buy a home that's flooded
Another way to cut costs is by not buying a home that has previously flooded, which will inevitably see your premium costs rise.
The Association of British Insurers says estate agents have a duty to tell you if a home you are looking at has previously flooded.
You can check if a certain postcode is in a high flood risk area by using the too.
If you already live in a high flood risk area, it might be worth reviewing your home insurance policy to ensure you're covered in the event of a flood.
READ MORE SUN STORIES
Pay up front
If you've got the money up front, it's worth paying for your premium in one lump sum instead of monthly, Ceri McMillan, insurance expert at price comparison site GoCompare, previously told The Sun.
This is because monthly payments come with interest charged on top, with paying up front saving you around 10%, Ceri said.
What is home insurance?
HOME insurance is designed to cover you in the event of fire, flood, or theft or loss of any item inside it.
There are two types of home insurance policy - contents and buildings.
Buildings insurance covers the cost of repairing any damage to the structure of your property which might have been caused by a fire or flooding.
The "building" includes elements like your roof, walls and floors as well as permanent fixtures such as windows or fitted kitchens.
Contents insurance says what it does on the tin - it covers you in case the contents of your home are damaged, lost or stolen.
You can buy either buildings or contents policies separately, or combined so you are covered across all scenarios.
Not all home insurance policies cover the same things though, so it's worth shopping around.
You can use price comparison websites like Compare the Market, GoCompare and Uswitch.
Most home insurance policies also come with an "excess"; - the amount you have to pay towards a claim.
Increasing your excess will see your policy go down, but means you'll have to fork out more if you have to make a claim.
Topics