Join Neighborhood Watch, prune your trees and 10 other ways to beat rising home insurance prices

Home insurance costs are skyrocketing.

This is due to rising inflation and repair costs following a wave of storms last year.

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Money rights expert Martyn James says: “Premiums have been soaring and it’s important to have cover if the worst happens, but with a few simple tricks you can reduce the cost whilst keeping your property and belongings protected.”

Laura Miller explains how clever tricks can reduce the cost of roofing. . .

The average home insurance quote increased by almost 28% in the year to the end of July.

That’s the shocking revelation from the latest Consumer Intelligence Home Insurance Price Index.

Combined buildings and contents premiums paid by customers rose to an average of £375 a year, and buildings-only cover to £298, while contents-only cover remained at £132, reports the Association of British Insurers (ABI ).

Every region saw prices soar, from a 34% jump in London to 22% in the West Midlands, data analysts Consumer Intelligence say.

Blame it on inflation, and 2023 being the busiest year on record for weather-related home insurance claims, says the ABI.

Storms Babet, Ciaran and Debi in the last three months of last year caused £352 million of damage to homes.

Homeowners now looking for buildings and contents insurance on a budget should shop around for the best deal.

But if you’re still feeling burnt out, these tips can help you cut costs. . .

DON’T OVERESTIMATE

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THIS often happens with building insurance.

Many homeowners make the mistake of insuring their property for its market value, rather than the rebuild cost, and end up paying over the odds for their premium,” says Anna McEntee, insurance expert at Compare the Market.

The ABI reconstruction calculator at abi.bcis.co.uk can help.

Likewise, when taking out contents insurance, be as accurate as possible – if you overestimate, you will end up paying dearly.

Aviva’s free home contents value calculator, at aviva.co.uk, can help you estimate how much cover you’re likely to need, based on what you have.

GET A COMBINED POLICY

“IF you get a combined buildings and contents policy, the insurer may give you a discount,” says McEntee.

It’s worth doing some research and getting quotes for individual and combined policies to see how they compare.

DO NOT FOLD THE COVER

MAYBE your bank account includes cell phone coverage? Maybe you insured your tablet or laptop when you bought it, or have a gadget insurance policy?

If you have separate policies covering the same thing, you can save by canceling duplicate coverage.

JOIN A NEIGHBORHOOD WATCH SCHEME

SOME insurers offer discounts to members of these schemes.

“This is because you are taking activities steps to reduce the likelihood of needing to make an insurance claim,” says McEntee.

KEEP AN EYE ON THE TALL TREES

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WHY on Earth could this be? Because tall trees around your home increase the risk of the foundation becoming unstable or the roof being damaged.

It’s a good idea to make sure trees are pruned regularly. You should expect to pay £100 to £150 to prune a small tree and around £500 for a larger tree, says trading website My Local Toolbox.

The average premium paid for a home insurance policy where a falling tree was listed as the only previous claim was £357, compared with £183 where there were no previous claims, says price comparison website Go Compare .

CHECK THE RISK OF FLOODING OF YOUR HOME

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YOU can find this out at the Environment Agency.

Garin Cole, home products manager at Aviva, says: “If your home is at risk, ask your insurer if it is part of the Flood Re scheme, which has been set up to help homeowners in high-risk areas access flood insurance.”

INCREASE THE SECURITY OF YOUR HOME

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CONSIDER adding high-quality locks to your doors and windows and installing a burglar alarm.

McEntee advises: “If you have approved safety and security systems, your insurer may consider reducing your premium.”

Among 11 common home security brands analyzed by data analytics site CrimeRate in 2024, the price range ranges from £120 for DIY doorbell-only home alarms up to £1,139 for fully equipped smart security systems with professional installation.

AVOID PAYING IN INSTALLMENTS

PAYING the premium in advance, all at once, generally reduces the cost of home insurance. If you choose to pay in monthly installments, you may be charged additional interest.

INCREASE YOUR EXCESS

“IF you are willing to increase the amount you contribute to a claim, the excess will typically pay a lower premium,” advises McEntee.

BUILD A DISCOUNT WITHOUT CLAIMS

IF you don’t claim on your home insurance, you may be rewarded with a discount on your next award. The longer you go without claiming, the more you can save.

McEntee advises: “You’ll likely be able to transfer the discount if you switch to another insurer, so factor that in when looking for a quote.”

CONSIDER A MULTI-YEAR STEADY BUSINESS

While loyalty isn’t always worth it and it helps to shop around for the best deals each year, if you prefer a little stability, consider a multi-year fixed-rate deal, suggests Pete Mugleston, mortgage expert at Online Mortgage Advisor.

He says: “This can protect you from price increases over the life of your policy.”

MAKE A COMPARISON

FIFTY one percent of customers could have achieved a saving of £225 on their buildings and contents insurance through Compare the Market, based on independent research from Consumer Intelligence during June 2024, so it’s always worth checking what comparison sites offer.

TAXMAN CLOBBERS ELDERLY

TENS of thousands of OAPs are set to receive tax demands this year for the first time since retiring.

A freedom of information request by LCP Partners revealed that almost 700,000 have been asked by HMRC to pay tax on their pensions. This was an increase of more than 120,000 people compared to two years earlier.

One reason given for the increase is the annual freeze in the value of the tax-free personal allowance, coupled with a steady increase in the value of the State Pension.

The personal allowance threshold, which is the salary point at which people start paying tax, has been frozen at £12,570 since April 2021.

Steve Webb, partner at pensions consultancy LCP and former Pensions Minister, told The Sun that the “long-term freeze” on the personal allowance could be financially damaging for pensioners.

He said: “Although an average bill of £665 may not seem very large, it could be the equivalent of around three weeks’ pension, and a pensioner whose income is just above the tax threshold may not have such a sum readily available.” .

He predicts that the number of pensioners receiving tax demands could increase further in the coming years due to the triple lock on pensions – meaning that pay rises every April by the highest inflation figure, the Kingdom’s average wage increase. United or 2.5 percent.

Markets do not yet know what the pension increase will be, but inflation figures released next week should give an indication.

MORTGAGE RATES ARE UP

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BORROWERS could face a rise in mortgage costs as some lenders raise rates and withdraw their cheapest offers.

Coventry Building Society, Co-operative Bank, Molo and LiveMore have all increased rates or withdrawn their best fixed rate offers from the market.

Before these latest changes, Coventry offered a five-year fixed rate mortgage from 3.69 per cent, one of the lowest rates on the market.

Home loan interest rates were trending downward, with many homeowners and buyers expecting further reductions in the coming months.

However, David Hollingworth, Associate Director at L&C Mortgages, warns: “The price of the fixed rate depends on market expectations regarding interest rates and the current uncertainty over the next budget, mixed messages from the Bank of England and global unrest. are driving up costs. ”

Swap rates, which indicate market expectations for future interest rates have been rising. This directly impacts the cost of fixed rate mortgages and lenders will look to raise their rates so they don’t lose out.

The two-year swap rate was 4.06% on Oct. 7, while the five-year swap rate was 3.81%, according to Chatham Financial. In September, the respective rates were 3.91 percent and 3.56 percent.

Swap rates will remain uncertain until BofE decides whether to cut interest rates by 5% on November 7.