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What's happening to home insurance premiums?
Storms and bad weather continues to drive claims to new highs
The average cost of home insurance fell around 2% in July to September 2025, figures from the Association of British Insurers (ABI) show.
The annual cost of combined buildings and contents cover fell, despite insurers paying out a record total of £4.6bn during the first three quarters of the year.
Here, Which? takes a closer look at the price of home insurance, why claims costs are rising and how to pay less for your premium.
What's happening to home insurance prices?
The ABI's latest report shows that the average price for a combined policy dipped to £384 in July to September 2025, down from £391 in the previous three months (April to June).
Average home insurance premiums have fallen steadily since peaking at £399 in the third quarter of 2024, but are £34 higher than the same period two years ago.
Released every three months, the ABI's data gives the most accurate picture of the market as it's based on prices consumers are actually paying, rather than quotes, and combines both renewals and new policies.
This chart shows how the average cost of a home insurance premium has changed since January 2022.
Comparison sites also publish data, but their figures only reflect quotes given to customers searching for home insurance.
The latest report from GoCompare echoes the ABI's data, showing premiums dropped 1.7% in the third quarter of 2025. The average combined buildings and contents cover cost £225 in July to September compared to £229 during the previous three months.
The comparison site adds that the latest figure is just £1 less than the same quarter last year.
Compare the Market's data also showed the average price of home insurance in September had fallen 13% year-on-year, from £226 in 2024 to £197 in 2025.
- Find out more: how to find cheap home insurance
Why is the cost of home insurance so high?
The latest ABI figures show that insurers paid out £1.5bn in claims in July to September 2025 – down slightly from £1.6bn recorded in the second quarter of this year.
Insurers paid out a record £4.6bn in property insurance claims during the first nine months of the year. That's £155m more compared to the same period last year. The ABI says if this trend continues, we could see providers payout more in 2025 than any other year since the industry body began recording this data.
Storms and floods continue to be the main driver behind the increase in claims payouts.
Breaking down the nine-month figures, damage caused by bad weather totalled £936m, up from £143m in 2024. Of this total, £596m was for damage to people's homes and possessions - 21% higher than last year.
- Find out more: does home insurance cover flooding?
Ways to save on home insurance
The cost of home insurance may be rising, but there are several ways to mitigate any premium price hike:
1. Shop around
This should always be the first thing you do. But with so many options, choosing an insurer can be hard.
Price comparison sites that allow you to view multiple quotes at a glance are a good place to start. The main ones for insurance are Compare the Market, Confused.com, GoCompare and MoneySuperMarket.
To get a clearer idea of how different home insurance policies compare, you could also see our guides to the best contents insurance and buildings insurance. We've rated policies from dozens of insurers to help you choose the right cover.
But remember, not all providers are on there. Which? Recommended Providers Direct Line and NFU Mutual are examples of this.
2. Don't automatically renew
Never agree to the auto-renewal clause included in your 12-month home insurance agreement. This means that once your initial one-year contract lapses, you will be automatically enrolled for another year.
Instead, use the best quotes you've gathered to negotiate with your insurer and take your business elsewhere if it doesn't improve its offer.
3. Renew early
If you leave arranging home insurance until the last minute, generally speaking, insurers are likely to charge you more than if you bought the cover a few weeks in advance of it starting.
Try buying your insurance weeks (rather than days) ahead of the policy going live.
4. Pay annually
Paying by the month for cover can make it more manageable for your budget, but it's usually the most expensive option.
When paying monthly, you're effectively borrowing the year's premium to repay in instalments. This typically comes with interest, hiking the overall cost.
5. Cheaper isn't always better
Opting for the very cheapest policy you find won't necessarily save you money in the long run.
If your policy comes with steep excesses or significant exclusions, you'll feel the pinch when it's time to claim. This means it's vital that you check the policy details carefully before buying the cover.
- Find out more: how to find cheap home insurance
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This article is regularly updated with the latest figures from the ABI and other home insurance indices. The ABI occasionally adjusts previously published figures when updated data becomes available.
