Discover what affects home insurance prices and learn simple tips to help lower your costs.
EASY AS HACK
Here are some common ways people may be able to reduce their home insurance costs, depending on their circumstances and insurer:
- Don’t over-insure
- Improve your home security
- Pay annually
- Increase your voluntary excess
- Buy a combined policy
- Only pay for the cover you need
- Maintain your home
At a glance
Home insurance policies protect your home’s structure from risks such as fire, storm, water damage and theft. If your policy includes contents, it can also safeguard your belongings. The cost of your cover can vary depending on things like where you live, the type of property you have, how secure it is and the level of cover you choose.
How much is home insurance?
Home insurance costs vary based on many factors. These include your age, the type of property you own, and outside influences such as extreme weather, the cost of building materials, and even the value of gold.
The total amount insurers pay out for claims can also contribute to higher home insurance premiums. For the last few years, insurers have paid out record amounts due to increased damage from climate change.[1]
These aspects of home insurance can feel overwhelming, but understanding these factors can help you to find the right cover and may even reduce your property insurance costs.
How much does home insurance cost?
Association of British Insurers (ABI) data shows the annual average cost of combined building and contents home insurance in the third quarter of 2025 was £384:[2]
In the previous quarter, it was £377, and in the same period in 2024, it was £369. Premiums rise and fall for many reasons, including adverse weather conditions.
Average home insurance rates in the UK also depend on the property you’re insuring, the type of cover you choose and the level of cover you get.
What type of home insurance do you need?
The term ‘home insurance’ embraces two types of insurance that protect your home against various risks, including damage, destruction, and theft:
- Buildings insurance – covers the building itself, not just walls, floors and roofs, but also fixed items like toilets, sinks, baths, and fitted kitchen cabinets.
- Contents insurance – covers the belongings you keep inside your property boundaries, such as clothes, curtains and blinds. It may also cover freezer contents, depending on your policy.
You can also choose to combine buildings and contents insurance in one policy. The level of cover can differ between providers, so it’s always worth checking the details to make sure it’s right for you.
Contents cover is worth considering for most homes, but buildings insurance is typically only required for freehold homeowners. If you have a mortgage, your lender may ask you to have buildings insurance in place.
Compare building and contents insurance to see what works best for you and your home.
What factors affect the cost of home insurance?
The main factors that impact average home insurance costs are your property, its location, your personal details and insurance needs, and external factors.
Your property profile
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Age of the property
The cost of rebuilding an older home differs from that of a modern house, affecting house insurance rates. A Victorian house with original features may require specialist materials, such as reclaimed roof tiles, to make right, whereas a standard modern property uses everyday building products. -
Property type
Whether you live in a detached bungalow, a flat/ apartment, a listed property or a terraced house, the type of property you insure is a factor in home insurance pricing. Insurers will also consider how many bedrooms, en-suites, and bathrooms the property has. -
Property size
Next, let’s consider the home’s size. Naturally, a five-bedroom luxury house or one filled with valuable belongings will have higher insurance costs compared to a smaller one-bedroom flat or a modest house without expensive items. -
Rebuild value
The cost of completely rebuilding your home depends on inflation and its construction. If your house is listed, it may require specialist trades, such as stone masons, thatchers, or joiners. Find out the estimated costs to rebuild your home using the Residential Rebuilding Cost Calculator. -
Building wall type
Stud walls used in modern buildings are easier to replace than brick-built walls in period properties, for example. As they’ll take less time to install than brick, the cost of replacing them is less.
Your location details
Insurers set home insurance prices based on the risks to your home, such as its location.
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Local crime rates
Insurers use postcode data to review local crime rates, which directly influences how they assess risk in your area. Higher incidences of theft, burglary and vandalism are likely to drive up your home insurance costs.
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Flooding risk
If you live in an area with a high risk of flooding, insuring your home can be more challenging and costly than in areas less prone to flooding. This means that the average cost of your house insurance is likely to be higher. However, it could still be affordable if your home qualifies for the Flood Re scheme. Flood Re may help make cover more available or affordable for some eligible homes. Eligibility is subject to the scheme rules. Read about this and other myths and misconceptions about home insurance. -
Geographic location
As well as flooding, other geographic considerations, such as a history of subsidence[3] or homes at risk of landslip, could increase your house insurance costs.[4]
Your personal profile
The risks associated with your personal profile also affect your likelihood of making a claim, so insurers like Ageas consider the following when determining home insurance costs:
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Your claims history
If you have made a claim in recent years, your premium will typically increase (likewise, your premium may reduce if you haven’t claimed). -
Your credit score
As part of building your risk profile, insurers will analyse your credit history to assess your reliability at keeping up payments. -
Your jobs
Working away from home for extended periods can affect how insurers rate your premiums. Some jobs that involve working from home, client visits, or keeping large amounts of high-value stock can also change insurers’ perceptions of risk. -
Your age
Insurers, like other financial institutions, must be able to justify that pricing is genuine and does not discriminate against customers based on their protected characteristics, of which age is one. Insurers can use age, but only if there is a good reason (known as objective justification).[5]
Your insurance needs
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The level of cover you need
How much cover is correct for you will depend on the type of property you’re insuring and its size, or whether you have high-value contents. -
Your excess
Another factor in house insurance cost is the amount of excess you must pay or choose to pay. For example, if you live in an area that floods, you may voluntarily bump up your excess to lower your expected premium. Just make sure you can afford to pay the excess should you need to claim. -
Optional extras
Insurers typically offer customers add-ons to their insurance, such as accidental damage to cover them for breaking the TV or high-value item insurance for items valued at more than the single-item limit (usually £1,000-£1,500).
External factors
Your home insurance cost can rise or fall depending on external factors, including:
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Inflation
UK inflation reflects the cost of living over a specific period.[6] As rates rise and fall, insurers pay out more or less on claims, passing the impact through to policyholders through premiums. -
Extreme weather
Extreme weather events, such as heatwaves and flooding, are becoming increasingly prevalent. The risk of damage to your home can affect your house insurance costs. -
Building material costs
Another factor driving the typical price of house insurance is the high cost of materials and labour used to rebuild homes if no one can repair them. The Building Cost Information Service (BCIS) forecasts a 15% rise in building costs from 2025 to 2030.[7] -
Fraud
Fake or inflated insurance claims are another influence on home insurance costs. ABI estimates that fraud adds £50 to honest policyholders’.[8]
Read about our fight against fraud.
How to reduce the cost of home insurance
How you pay is one way to reduce home insurance costs. Paying annually rather than monthly is usually cheaper.
You can sometimes save by taking building and contents insurance with one insurer rather than buying separate policies from different insurers.[9]
Check you’re only paying for the cover you truly need. Over-insuring your home and belongings can mean paying for insurance that isn’t necessary.[10]
You could also increase your excess – but only if you can afford to pay it.
Other ways to reduce your home insurance costs:
- Improve your home security – security improvements, such as burglar alarms and lights on timers, can potentially lead to home insurance cost reductions
- Where the deterioration caused damage.
- Build up your no-claims discount – some insurers operate a kind of no-claims discount for buildings and contents or combined policies that may mean better home insurance rates if you’ve had few or no claims.
Expert advice
While the insurer can’t provide advice, you can get expert advice from jewellers on how much your jewellery is worth.
The Royal Mint’s live gold price[10] shows that prices had reached a five-year high by the end of January 2026. And it consistently broke records in 2025.[11] Swings in the price of gold can affect the single-item limit that insurers automatically cover in general contents insurance. It is typically £1,000 to £2,000, depending on your insurer – at Ageas, we apply a single article limit of £2,000 to £2500.
When gold price has risen, this range may no longer be enough to provide protection, and you might need to declare them individually if they are over the threshold. A jeweller can give you a quote on individual items.
Get a home insurance quote
How much is home insurance? Find out with a personalised home insurance quote.
FAQs
Do you legally need home insurance in the UK?
No, you do not legally need home insurance in the UK, although mortgage lenders often insist you have buildings insurance. Requirements may vary depending on lenders or lease agreements
In any case, it’s a sensible precaution. Freeholders should consider buildings insurance because the cost of repairing a property can be high.
Contents insurance is not a legal requirement either. However, replacing damaged or stolen items could cost thousands of pounds. Try estimating the contents in every room to see how it adds up.
Can you change your home insurance excess?
Whether you can change your home insurance excess depends on the provider and the cover you have chosen. Generally, you can adjust voluntary excess when setting up or renewing your policy.
Increasing the total excess can reduce your annual premium because you’re shouldering more risk for claims. Decreasing your excess means your premium increases, but you pay less up front if there’s a claim.
Your insurer will ask you to pay the excess before approving your claim, so you must be able to pay it. Ageas does not apply an excess in some cases – check your Statement of Fact for details of your home insurance policy.
Head to page 10 of the Ageas Home Policy Booklet for an explanation of excess and how it works.
Sources
[3] https://www.ageas.co.uk/newsroom/reducing-the-impact-of-subsidence-through-early-detection
[4] https://www.moneysavingexpert.com/insurance/home-insurance/non-standard-insurance/
[5] https://www.gov.uk/guidance/equality-act-2010-guidance
[7] https://www.bcis.co.uk/news/bcis-construction-industry-forecast/
[10] https://www.royalmint.com/gold-price/
[11] https://www.investopedia.com/gold-price-history-highs-and-lows-7375273
