Home Insurance Rises in 2011

Home Insurance Rises in 2011

by Rebecca Hall on 30 Mar, 2011

With uncertain job security, rising VAT and increased fuel costs (despite the 1p giveaway in the budget) the last thing you may want to worry about is the cost of your home insurance quote. However, worry about it you should.

Research conducted by Moneysupermarket.com has shown that between January 2010 and March 2011 home insurance premiums have risen an average of 6%, pushing the average cost of a policy up from £142 for the year to £151.

Obviously this is not the largest increase, but as the old Tesco ad says “every little counts” and in these straitened times it could not be truer.

Analysts are blaming premium rises on increased fraudulent activity, with some providers receiving 170 claim requests a day. As more people make claims, the more the insurer has to pay out, meaning they need more money from their pool of customers, hence higher premiums.

Arguably, this causes a vicious cycle as otherwise fair minded customers resent their premiums going up as a result of those trying to get one over on the insurance company, and are more likely to make fraudulent claims themselves, in an effort to get value for money out of their inflated premiums.

Either way, the extra few pounds on home insurance are an expense that many households could do without, making 2011 the year that shopping around on your home insurance will really pay off.

Additionally, there are a few things that can be done to make you seem like less of a risk to insurance providers and therefore lower your premiums. For example, fitting a burglar alarm, joining your neighbourhood watch scheme and even giving up smoking.

Anything you can do to make your house safer against  damage and theft will make you statistically less likely to claim, therefore decreasing the cost of your premium (as well as making your home safer – a double positive).

Naturally, as with any type of insurance, no claims bonuses are also integral to getting lower insurance costs. This means that if there are any small issues that you could claim on insurance, in the long run it might be far better to deal with them yourself, rather than to automatically claim on anything you can.

The basic take home from this is that home insurance is rising, in common with almost everything else. And if you are on a limited income (as most people are) then a little extra thought could save you a significant sum of money.

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About the Author

Rebecca Hall


Rebecca Hall worked as an independent mortgage adviser for 10 years before turning to financial journalism full time. She has strong links to the CAB advising families on mortgage refinancing.