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12 Jun 2020

Home insurance premiums jump in cost: how much do homeowners pay in your area?

One in 10 households consider cancelling insurance policies due to financial pressures

Home insurance prices have increased by nearly 3% in the past year, leading to one in 10 customers considering cancelling their policies due to financial constraints.

A report by Consumer Intelligence found prices have reached an average of £152 a year, and households who are increasingly working from home are beginning to question whether contents insurance policies are worthwhile.

Here, Which? explains what's happened to premiums in your region and how COVID-19 could affect claims.

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Home insurance premiums on the rise

A new report shows that home insurance premiums have risen by 2.9% in 12 months and one in 10 households are considering cancelling their buildings and contents insurance policies.

The UK lockdown, which started in March, has also had an effect on prices and consumer confidence.

Consumer Intelligence says premiums have increased by 0.5% since the lockdown began, and with millions of homeowners spending more time at home, one in seven households are considering cancelling their contents insurance policies.

Will COVID-19 affect insurance prices?

Consumer Intelligence believes there could be a rise in home insurance claims, but with the caveat that homeowners are more likely to spot major issues earlier, such as burst pipes, resulting in damage limitation.

In May, some of the biggest insurers told us that break-ins had become less frequent, resulting in fewer theft claims, but that they'd seen a rise in accidental damage claims.

Consumer Intelligence says changes in claims activity and the prospect of more cancellations could force insurers to change their pricing, but that it's still too early to say whether premiums could fall.

On 3 June the FCA introduced guidance for insurance firms to consider the impact of coronavirus on the value of their insurance products. It wants firms to make sure products continue to be useful. For example, motor insurance is useful where theft or fire can still occur.

Firms are being told to review their product lines and decide on any actions within six months. This might include changing how benefits are delivered, refunding some premiums or suspending monthly payments for a certain period of time.

This follows on from the FCA's guidance on 18 May. It told insurers they must help customers with general and protection insurance policies who are struggling with payments because of the effects of the coronavirus pandemic.

The cost of home insurance where you are

London has by far the highest home insurance premiums in the UK, with an average policy costing £205 - that's £48 more than the South East.

The lowest premiums are in the North East of England, where cover is on average £133.

The highest year-on-year price increases were seen in London (6.8%) and the South East (6.1%), while the lowest were recorded in Wales (1.3%) and the North East (1.6%).

RegionAverage premium (combined policy)Year-on-year price rise
South East£1576.1%
North West£1522.8%
East of England£1495.5%
Yorkshire & The Humber£1442%
West Midlands£1413.3%

Source: Consumer Intelligence

How does age affect premiums?

Older properties have the highest home insurance premiums, with Victorian-era houses (built from 1850-1895) the most expensive to insure, at £184. Homes built between 1925 and 1940 follow close behind at £165, a rise of 6.3% in the past 12 months.

Consumer Intelligence says one reason older properties cost more to insure is that ageing pipes can lead to water damage claims.

There's little evidence that the age of the homeowner is a major factor in insurance premiums.

Homeowners over 50 pay an average of £143, compared with £158 for under-50s. Both groups saw a year-on-year increase of just over 4%.

Do I need to tell my insurer I'm working from home?

If you're working from home during the COVID-19 outbreak, you won't usually need to tell your insurer.

If you use equipment that belongs to your employer while working at home, this should be covered under its business insurance.

If you've bought equipment to work from home, you may need to inform your insurer if you think the new items mean you will exceed the limit on your contents insurance policy.

The main exception to these rules is if you're running a business from home and are storing stock, in which case you should tell your insurer.

Best and worst home insurance providers

Finding the right home insurance policy can be complicated, but we're here to help.

We've analysed the policies currently available from dozens of insurers and gathered feedback from thousands of customers to name our best and worst home insurance providers.

In this year's analysis, we awarded three insurers the coveted Which? Recommended Provider status, with each achieving an overall score of more than 80%.

To find out which brands topped the charts, check out our full guide on the best and worst home insurance.

Coronavirus advice from Which?

Which? experts have been compiling the advice you need to stay safe and ensure you're not left out of pocket during the COVID-19 outbreak.

You can keep up to date on our latest coverage over on our coronavirus advice hub.