Great news! Home insurance has got cheaper

Here's a look at our latest Home Insurance Monitor

12:29 04 June 2013

While the cost of everyday living, from food to petrol to energy bills is rising, home insurance premiums have actually taken a tumble in recent years, which offers at least some good news for hard-pressed households.

 

It might be tempting to skimp on home insurance cover to save a few pounds - but being under-insured could leave you more out of pocket in the long run if it comes to making a claim. And with prices dropping it's even less worthwhile to take that risk.

 

Here's a look at our latest MoneySupermarket Home Insurance Monitor. The research shows what's happening to home insurance costs and explains how you can make sure you get the best possible price on your cover.

Cheapest in years

 

Home insurance prices have plummeted by 13% since the spring of 2010, according to our latest quarterly report, taking the average premium to £136 a year.

 

Analysis of more than 3.5million found prices had fallen in all 121 UK postal regions, between 2011 and 2012. It also found that Kingston upon Thames and Halifax saw the biggest price drops, falling 14% and 13% respectively.

The figures show Norwich to be the cheapest place in the UK for home insurance, with average premiums of £113.22. The table below, based on the research, shows the UK's top five cheapest place for home insurance.

 

Top 5 Cheapest Postal Regions

 

Postal Area	Winter 2012	Decrease Winter 2011-12 (%)	Increase Winter 2011-12 (£)
Norwich	£113.22	-6.5%	-£7.88
Hereford	£114.48	-6.8%	-£8.41
Llandrindod Wells	£116.35	-9.2%	-£11.84
Telford	£118.72	-11.5%	-£15.38
Exeter	£119.26	-8.2%	-£10.60

 

 

Year-on-year, average combined home insurance premiums have fallen by 7%, standalone buildings cover is 7% cheaper and standalone contents cover has fallen by a massive 16%.

Hannah Jones, MoneySupermarket's home insurance expert, said: "Competition among providers is continuing to drive down the cost of home insurance policies and it's important that consumers take advantage of this.

"Those who become complacent by sticking with existing policies will miss out if they don't take advantage of shopping around. Find the best deal on home insurance is quick and easy to do and the average annual saving made by those using MoneySupermarket is £212."

 

Set your own premiums

 

Regardless of national pricing trends, you can lower your own home insurance costs by changing the way you pay, or by improving your home's security.

 

As I explain in my article Five ways to pay less for your home insurance, combining your buildings and contents cover with the same provider should earn you a discount - as much as 40% in some instances.

 

You used to have to buy buildings insurance from your mortgage provider, but that's no longer the case, so you're free to shop around for the best price - which usually means getting both buildings and contents cover from the same insurer.

 

You might be able to get cheaper cover by leaving out any optional extras you don't really need, but only if you genuinely won't need them.

 

As I covered in my article Are bells and whistles on your home insurance policy worth the cost?, you could end up paying twice for the same protection. For example, you might be paying for home emergency cover to protect against a boiler breakdown, but your energy supplier might already offer you similar protection. Make sure you only pay once for the same cover.

 

You should also read your contents insurance policy wording carefully - you might not need accidental damage cover if your standard policy offers enough protection in the first place, for instance.

Improving your home's security should also save you money, as it'll be more difficult for thieves to get in or get away with it. Having a National Approval Council for Security Systems-recognised company install a house alarm is a good place to start.

 

With robust security in place, your home should be safe from intruders and you won't have to make any claims. This will earn you a no-claims discount and make your premiums cheaper in future.

 

As Hannah Jones explained, you should always shop around for the best price come renewal time. You won't be rewarded for your loyalty by your existing insurer, but a different insurer will probably give you a better price as a new customer.

 

Finally, paying your premium up-front rather than spreading the cost over monthly instalments should earn you a slight discount too, as will opting for a higher excess - but remember you will have to pay this if you make a claim, so make sure it's actually affordable.

 

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.