Home Insurance Costs Spike by 31% within a Year

The cost of home insurance surged by nearly a third (31%) from January to March 2024, according to data from Compare the Market.

In the UK, the average home insurance bill climbed from £159 in 2023 to £209 this year, marking a £53 hike.

During the first quarter of 2024, this upward trend affected all kinds of residential property, including bedsits, bungalows, flats, houses, and maisonettes.

Insuring a bedsit was notably pricier, averaging £423, and registered the biggest yearly premium jump of 41%, up from £301 in 2023.

Following bedsits, flats saw the next highest insurance costs, averaging £221, and witnessed a 36% year-on-year increase from £163. Similarly, owners of bungalows, houses, and maisonettes have seen their insurance costs surge by more than 30%.

Helen Phipps from Compare the Market comments, “The upward trend in home insurance rates in the year’s initial quarter is adding to UK homeowners’ financial pressures.

“Rising repair and construction costs might be influencing this, as shown by the Association of British Insurers (ABI), which reported a near 10% climb to £2.55 billion in insurance payouts in 2023.

“To combat rising premiums, homeowners should explore options to cut down costs. A good strategy is to shop around for various price points and policy types. For instance, using Compare the Market could save you up to £211 on home insurance.

“Ensure that your insurance covers an accurate valuation of your property, avoiding overestimation. You might also lower rates by bundling your buildings and contents insurance with one provider.”

Regional Variations

Rising home insurance rates are a trend across various UK regions. Northern Ireland homeowners faced the steepest hike, with a 53% increase from £250 in early 2023 to £383 during the same period in 2024.

Notably, Greater London and East Anglia had over one-third increases (36%), along with Scotland (35%) and the South East (35%).

Following Northern Ireland, Yorkshire and The Humber was the second most costly region for home insurance, with average premiums reaching £366.

Greater London had an average premium of £333, the South East was at £233, and East Anglia at £229.

Impact of Flooding

Insurance for properties with a history of flooding is, on average, £245 or 117% more expensive, with premiums typically increasing to £454.

Though high, this gap has slightly shrunk compared to early 2023, when insuring previously flooded homes was 121% costlier.

Additionally, premiums for homes with flood histories rose by £103, or 29%, from the previous year’s £351, aligning with the general increase seen by homeowners.