| Home insurance premiums increased by 8.5% in Q4 2024 due to rising expenses and extreme weather | In Q1 of 2025, UK insurers paid out a record £886m in domestic property claims | Save by combining buildings and contents policies, paying annually, shopping around and avoiding unnecessary extras |
Rising construction expenses, higher property values, and increasingly extreme weather patterns have all contributed to an 8.5% increase in combined home insurance premiums across the UK.
Data from the fourth quarter of 20241 reveals that the average annual cost for a buildings and contents insurance policy climbed to £231. However, prices vary significantly by region. For instance, Greater London ranking as the second most expensive area, saw a median premium of £336. Scotland aligned more closely with the national average at £228, while the most affordable regions in England were the North East at £190 and the North West at £196.
Rising re-build costs, driven by material shortages, higher labour rates, and broader inflationary pressures, have placed added strain on insurers. Compounding the issue, claims activity has spiked. In the first quarter of 2025, UK insurers paid out a record £886m2 in domestic property claims – a
20% year-on-year increase, largely due to severe weather events.
Tips to reduce costs
Even with premiums on the up, there are still ways to keep your insurance bill manageable. Opting for a combined buildings and contents policy, avoiding unnecessary extras, paying annually rather than monthly and shopping around can all lead to savings. Your individual circumstances also play a role. Factors like how many bedrooms your home has and whether you have a burglar alarm, will influence your premium.
Going away this summer?
If you’re going on holiday, remember not to leave a spare key in an obvious place like under a plant pot or doormat. Most insurers will only honour theft claims if there’s clear evidence of forced entry, so taking small precautions can help protect your cover.
1Go.Compare, 2025, 2ABI, 2025
It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for guidance only. Some rules may vary in different parts of the UK.