Rise in home insurance premiums expected as Covid-19 restrictions ease

• Home insurance premiums have fallen by 3.7% over the past 12 months as a result of the COVID-19 pandemic 
• Prices are expected to rise slightly as restrictions ease and less people work from home. 
• The average buildings and contents policy now stands at £146. 

Over the last 12 months, COVID-19 has pushed the home insurance premiums down by 3.7%, with the average buildings and contents policy now standing at £146, analysis from data analytics expert Consumer Intelligence shows. However, the company predicts that premiums will begin to rise slightly as lockdown restrictions are eased and less people work from home.  

“The pandemic is largely responsible for these falling prices, given more people are at home and claims costs have fallen,” says John Blevins, Head of Product at Consumer Intelligence. 

“I don’t think we will see claims costs rising to the same pre-pandemic levels as the nature of work has changed and more people will likely remain working from home than before,” says Blevins. “It shouldn’t cause a large spike in prices; however, they will begin to rise.” 

Age differences

Younger homeowners (under 50s) typically pay £155 for an annual buildings and contents policy.  While the over-50s pay £135 for similar insurance – a difference of £20 between the two age groups. 

Into the regions

London continues to be an outlier for the cost of home insurance. At £209 for an average annual policy, it’s nearly 45% more expensive than the UK national average of £146.

The North East (£131) is now the cheapest region, although the East Midlands (£132) and the South West (£133) follow closely behind. 

Unsurprisingly, all regions in the UK have witnessed price reductions in the past 12 months. The Eastern region (-5.7%) along with the South East (-5.2%) and North East (-4.7%) saw some of the biggest falls.  

London, despite having the highest home insurance premiums, saw price reductions of just 2.4% over the same period.  

Property age

Older homes from the 19th century continue to be the most expensive to insure. Victorian-era properties built between 1850 and 1895 attracted the highest average premiums at £180 for a typical annual policy, while those erected between 1895 and 1910 (£160) also saw higher-than-average premiums of £160. These two groupings also saw the lowest reductions to their premiums over the last 12 months – just 1.1% for homes built between 1895 and 1910, and 1.2% for those erected between 1850 and 1895.  

Properties built this century are now the cheapest to insure at £138 on average for a buildings and contents policy, followed closely by those built between 1970 and 1985 (£139).  

Properties erected between 1940 and 1955 saw the largest reductions to their premiums of 5.1% over the latest 12-month period.

The table below shows average premiums and price rises around Great Britain

Notes to Editors
¹ The cheapest premiums were calculated by comparing the prices offered for 2,100 people by all the major Price Comparison Sites and key direct insurers. The top 5 prices for each person were compared to the previous month’s top 5, then these variations averaged to produce the index.