How much is the average cost of home and contents insurance?

Worryingly, the Association of British Insurers (ABI) say around 7.5 million households have no insurance at all.

Home insurance is the umbrella term for buildings insurance and contents insurance. You can either buy these two types of insurance separately or opt for one combined policy which covers both.

The average cost of a contents insurance policy is £57 per year, yet those 7.5 million with no policy in place are leaving over £266 billion in possessions unprotected.

Figures from the ABI show that the total value of possessions owned by all UK households comes in at a whopping £950 billion. To put that into perspective that’s more than 1,900 new London Olympic Stadiums.

Furniture, TVs, personal belongings – basically all the things in your home which aren’t part of the structure or the building.

Policies differ but generally you will be covered against fire, theft and flood, bear in mind that ‘accidental damage cover’ is usually optional so don’t assume it’s included.

There are also optional extras that might push up your cost:

• Personal possessions cover – items such as laptops and phones that you take outside of your home
• Going abroad – if you lose or damage your possessions whilst you’re away then you might be able to claim through your insurance.

Buildings insurance covers the property itself as well as the permanent fixtures and fittings, such as the kitchen and bathrooms and on average costs £111 a year, according to Money Supermarket.

Pre-Covid, the cost had been rising, thought to be down to a greater chance of your house being damaged by the weather, due to climate change, and a rise in the cost of the materials needed to fix it. But lockdown appears to have had the opposite effect on premiums with insurance costs falling over the past nine months. With people being at home more, there has been a decrease in the risk of burglaries and home owners have also been around to spot and deal with 'escape of water' - such as leaks - before they cause too much damage.  

It’s not just the weather that buildings insurance protects you against. Although policies vary from each provider they generally cover you for the following:

• vandalism
• subsidence
• falling trees
• fire, smoke, explosions
• car and lorry collisions
• water damage from leaking pipes
• oil leaking from your heating system
• natural events such as storms and floods.

If you’re a homeowner then it’s likely your lender would’ve asked for you to have buildings insurance sorted as soon as you legally became responsible for the property.

General wear and tear isn’t normally included in your policy, as well as things like leaking gutters, some pests, and frost – but it’s worth checking what other exclusions your provider has in place.

If your house has also been left unattended for more than 30 or 60 days then you might not be able to claim for loss or damage.

There are certain factors that can affect the cost of your insurance. If you’ve claimed before then this might restrict who you can go with in the future or might push up your premium.

Where you live also affects the cost, with high-risk flooding areas and more wealthier areas having a higher price. If your house is Grade 1 or 2 listed can also affect the cost, as they are classed as ‘special interest’ so will cost more to insure.

Working from home and using your home for business, as well as the age of your property can all affect your home insurance cost. It’s worth checking with your provider and shopping around if any of these affect you.

There are a number of ways to help reduce the cost of your home insurance policy:

• Combining could be cheaper – opting for the same provider for both buildings and contents insurance might get you a discount, as well as making it easier if you need to claim for something that has affected both building and contents.
• Making use of offers – have a search around for any providers that guarantee to beat any quote, on a like-for-like basis.
• If you can, pay annually – there could be around an extra 6% to pay if you pay monthly, so paying annually might have you lower the cost.
• Don’t auto-renew – shop around if your policy is close to expiring. Don’t just let it auto-renew as you could find the same cover cheaper with a different provider. Or alternatively ask for a better price if you like your current provider.