You might have noticed a gradual increase in the cost of your home insurance. We take a look at the reasons why and how you can help keep your premium price rises to a minimum. 

What’s behind the increased costs of home insurance?

Most of the increase is due to the government raising Insurance Premium Tax from 10% to 12% in June 2017, which has added an average of £15 to the cost of combined buildings and contents cover. 

However, other factors have an effect:

Insurance fraud cost the industry £1.3 billion in 2016, according to figures from the ABI, and insurance providers spend at least £200 million every year identifying fraud. Customers share the burden of that fraud and it adds £50 to the total cost of household insurance.

Insurance providers are businesses and have to make a profit. As with all businesses, some of their costs get passed on to customers.

According to a recent report from Consumer Intelligence, the weak pound (due to Brexit) is forcing up the cost of imported building materials and increasing the cost of repairs to houses. This, alongside the fact that homeowners are building more extensions and making more claims for leaky bathrooms, is also contributing to the increase in home insurance premiums.

Does extreme weather affect home insurance premiums?

While we’ve had just a couple of storms this autumn, the winter of 2016/2017 saw five particularly bad storms and it’s recognised that an increase in poor weather could push premiums up in the near future.

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Shop around to save money on your home insurance

Another reason why your home insurance might increase every year is simply because you let it. Rather than automatically renewing your policy with your existing provider each year, use our home insurance comparison service to see if there’s a better deal out there.

For example, almost a third of customers could save an average of £122.08¹ on their home insurance, while 10% of could see an annual saving of £237.612

If you’re looking for even more ways to make a saving on your home insurance, check out our top tips on how to reduce the price of your premium.

1 Based on Online independent research by Consumer Intelligence during February 2018 30% of customers could save up to 49.57% on their home insurance premium
2 Based on Online independent research by Consumer Intelligence during February 2018 10% of customers could save up to 62.78% on their home insurance premium.