The past year has been tough in a lot of ways, with the way we live our lives changing completely for millions of people. One silver lining that appears to have arisen as a result of lockdown, however, is a drop in home insurance premiums.
A study by Consumer Intelligence found that home premiums have dipped 0.9% since April – coinciding almost exactly with the date that the UK went into its first lockdown.
Why have home insurance premiums dropped?
For the past year, the large majority of people have spent more time at home than ever before. Whether that’s because they’re working from home and logging into work remotely, furloughed from their regular job, staying home to shield or protect vulnerable family members, or simply as a result of the national lockdown restrictions in place.
In turn, this has lead to a change in the accidents and incidents experienced at home. For example, the Office for National Statistics (ONS) reported a reduction in theft-related crimes, including home burglaries, by more than a third in the first 2020 lockdown.
With fewer homes being burgled, fewer people are making a claim on their home insurance policy – which can be reflected in the drop in premiums.
What else can affect the price of my home insurance policy?
There are a few things that can impact how much you pay for your home insurance. A few major factors can include:
Location
Home insurance premiums can vary depending on where in the UK you are living – with London typically more expensive and the North East and North West typically seeing some of the lowest prices for home insurance.
Likewise, public data on your property’s local area can affect the quote you are given for your home insurance policy. Things such as flooding risks and official crime data could all have an impact on how much you are required to pay.
Property structure
The structure of your property could impact your home insurance premium. For example, if the way your home is built puts it at higher risk for fires, you may be quoted more for your home insurance policy.
Buildings vs contents insurance
Whether you choose to take out buildings insurance, contents insurance, or a combination will affect the overall price you pay. As a brief overview, buildings insurance covers the property itself and any fittings, while contents insurance will cover your belongings stored inside your home, such as furniture and personal possessions.
Claims history
Finally, your past claims history can have an impact on your home insurance premium. If you have made a claim, or several, in the past, you may find that your quote for renewal increases.
Home insurance premiums
The unprecedented events of the past year have certainly had an impact on a multitude of things, and home insurance is just one of them. The change in habits – more people working from home, and therefore fewer homes left unoccupied for long hours – has signalled a change in the risks that need to be calculated into a home insurance premium.
What still remains to be seen is what long-term effects this has on home insurance prices as the UK slowly re-opens.
Surewise home insurance is underwritten by Sagic, The Salvation Army’s General Insurance Company.
Building’s insurance policies cover the repair or replacement value of damage to property structure or fittings.