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Home insurance costs rise: will you have to pay more?

Will the prices be higher next time you get a home insurance quote?

The average price of a combined buildings and contents insurance policy has risen by 3.8% to £163.03, up from £157.13 this time last year.

Over the past three months alone, home buildings insurance policies are up 2.3% and the average home contents insurance policy had a smaller bump of 1%, according to the AA.

Find out why you could see the cost of your home insurance rise and how to find the best policy.

The cost of home insurance today

Since June last year, the cost of buildings insurance policies has risen 5.9% – more than double the current rate of inflation, which is 2.4%.

Policyholders saw their premiums jump from £113.12 to £119.79, on average, over that period.

By contrast, contents insurance policies decreased slightly (by 1.7%), and the average household saw their premium decrease from £60.72 to £59.69.

This means that the average cost of a combined home insurance policy has gone up by £5.90 year on year.

The table below shows how much home insurance costs have changed over the past year.

June 2018  June 2017  Change
Buildings-only insurance £119.79 £113.12 + 5.9%
Contents-only insurance £59.69 £60.72 – 1.7%
Combined home insurance (buildings and contents) £163.03 £157.13 + 3.8%

Why are home insurance costs rising?

Adverse weather conditions at the start of 2018 caused a spike in home insurance premiums, according to the AA.

Claims for property repairs increased following damage caused by sub-zero temperatures during the ‘Beast from the East’, which struck the UK in February and March this year.

Now that temperatures have soared to 30°C and higher in July, some insurers fear a new raft of claims for subsidence.

Subsidence occurs when the foundation of your home collapses or sinks, often due to soil shrinking and swelling because of drastic weather changes.

It’s one of the most damaging geo-hazards to properties in the UK, and causes around £3bn worth of damage every decade.

The Met Office Rainfall and Evapo-transpiration Calculation System (MORECS), which measures soil moisture deficit in the UK, is on a high amber.

This suggests that if the hot summer continues, there will be an increased risk of a spike in subsidence claims. Subsidence could be particularly prevalent in areas with clay soil, which shrinks as it dries out.

Does home insurance cover subsidence?

The majority of home insurers do cover damage caused by subsidence, but the level of protection will vary between providers.

Cover will also usually be limited to your main property and won’t include things like patios, garden walls, driveways or swimming pools.

While the UK heatwave is set to continue, we’ve already seen the devastating effects of flood damage due to heavy rainfall during storms.

Areas in Northern Ireland, for example, experienced a month’s worth of rainfall within a few hours, which caused flooding.

Most buildings insurance policies cover flooding as standard, including damage to the structure of your property.

You’ll also need to have contents insurance, which covers the cost of replacing your belongings, if you want to protect your possessions.

If you’re in doubt about whether you’re covered for subsidence or flood damage, get in touch with your insurer.

Finding the best home insurance policy

Whether you’re looking for your first home insurance policy or it’s time to renew, these simple tips can help you find the best home insurance deal.

It’s common for people to miscalculate the value of their belongings, either taking out a policy that doesn’t provide adequate protection or paying too much for a level of cover they don’t need.

Using a valuation calculator before you start looking for deals can help you get an accurate idea of home much cover you’ll need.

The next step is to shop around. Price comparison sites can help you compare lots of different deals quickly.

Don’t just go for the cheapest deal without reading the details, though, as it may not actually cover what you need it to.

Finally, read the terms and conditions of potential policies carefully. And if you’re unsure about anything get in touch with the provider for clarification.

Once you’ve signed on the dotted line, making a home insurance claim for things that are excluded from a policy will be impossible.

To help you find the best insurer, we’ve analysed the standard contents insurance and buildings insurance policies of more than 30 providers, and combined it with feedback from thousands of customers to produce impartial home insurance provider reviews.

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