UK homeowners are facing the highest increase in home insurance costs in almost a decade. The average price for building and contents cover has risen from £169 to £212 in the past year. Analyst Consumer Intelligence predicts that these costs could continue to climb. Research from the financial watchdog also suggests that before this latest rise, many homeowners had already cancelled or cut back on insurance policies. As winter approaches, homeowners are advised to find ways to reduce their premiums without compromising their coverage.
What type of cover do you need?
There are two main types of home insurance: buildings insurance and contents insurance. Buildings insurance covers the structure of your home, while contents insurance protects your belongings. If you own your home with a mortgage, buildings insurance is typically compulsory to cover the cost of repairing the property in the event of damage. For renters and those in social housing, it is the responsibility of the owner to ensure that the property is covered. Contents insurance is important for everyone, as it pays out if your belongings are damaged or stolen.
Valuing your home for insurance
When buying buildings insurance, homeowners need to provide a rebuild value for their property. Setting the value too low could result in the insurer refusing to pay out the full amount needed for repairs or a rebuild. The average cost to rebuild a three-bed semi is now around £296,000. Websites like the Association of British Insurers offer tools to help homeowners estimate the rebuild value of their homes.
Check what's excluded from your cover
It's important to check the policy carefully to see what is excluded from your contents cover. Tools in your garden shed and outdoor furniture may not be covered. It's also important to check for any caps on payouts for single items, especially if you have expensive tech or jewelry. It's often cheaper to add cover for gadgets and other items taken outside the home to your contents insurance rather than buying a separate policy. Bikes are usually not covered in cheaper contents policies, but they can be added.
Meters leave users smarting
Millions of households in the UK that have smart meters may face difficulties tracking their energy usage and bills if they switch suppliers this winter. According to government figures, nearly three million out of the 31 million smart meters installed in UK homes have gone into "dumb" mode, meaning customers can't use the plug-in display to monitor costs. Users also have to manually submit readings to their suppliers. Experts warn that this makes it harder for struggling households to monitor their spending and keep costs down.
