With the average UK household owning £52,000 of stuff, protecting it is an important cost to budget for.

The cost of your policy may have risen recently, with the average combined home and contents insurance policy now around £375, according to the Association of British Insurers (ABI). Worryingly, data published in February 2024 by GoCompare shows around 9.3 million households have no contents insurance at all.

What is home insurance?

Home insurance is the umbrella term for buildings insurance and contents insurance. You can either buy these two types of insurance separately or choose a combined policy which covers both.

Average cost of contents insurance

The average cost of a contents insurance policy is £132 per year – that’s just £2.54 a week – yet those 9.3 million with no policy in place are leaving over £276 billion in possessions unprotected.

Figures from Go.Compare show that the total value of possessions owned by all UK households comes in at a whopping £827 billion. To put that into perspective, that’s the same value as owning 224 Buckingham Palaces.

What does contents insurance cover?

Furniture, TVs, personal belongings – basically all the things in your home which aren’t part of the structure or the building. Policies differ but generally you will be covered against fire, theft and flood, bear in mind that ‘accidental damage cover’ is usually optional so don’t assume it’s included.

There are also optional extras that might push up your cost:

• Personal possessions cover – items such as laptops and phones that you take outside of your home
• Going abroad – if you lose or damage your possessions whilst you’re away then you might be able to claim through your insurance.

What is covered by buildings insurance?

It’s not just the weather that buildings insurance protects you against. Although policies vary from each provider they generally cover you for the following:

• vandalism
• subsidence
• falling trees
• fire, smoke, explosions
• car and lorry collisions
• water damage from leaking pipes
• oil leaking from your heating system
• natural events such as storms and floods.

If you’re a homeowner then it’s likely your lender would’ve asked for you to have buildings insurance sorted as soon as you legally became responsible for the property.

What isn’t covered?

General wear and tear isn’t normally included in your policy, as well as things like leaking gutters, some pests, and frost – but it’s worth checking what other exclusions your provider has in place. If your house has also been left unattended for more than 30 or 60 days then you might not be able to claim for loss or damage.

What can affect the cost of your home insurance?

There are certain factors that can affect the cost of your insurance. If you’ve claimed before then this might restrict who you can go with in the future or might push up your premium.

Where you live also affects the cost, with high-risk flooding areas and more wealthier areas having a higher price. If your house is Grade 1 or 2 listed can also affect the cost, as they are classed as ‘special interest’ so will cost more to insure.

Working from home and using your home for business, as well as the age of your property can all affect your home insurance cost. It’s worth checking with your provider and shopping around if any of these affect you.

How to cut the cost of your insurance

There are a number of ways to help reduce the cost of your home insurance policy:

• Combining could be cheaper – opting for the same provider for both buildings and contents insurance might get you a discount, as well as making it easier if you need to claim for something that has affected both building and contents.
• Making use of offers – have a search around for any providers that guarantee to beat any quote, on a like-for-like basis.
• If you can, pay annually – there could be around an extra 6% to pay if you pay monthly, so paying annually might have you lower the cost.
• Don’t auto-renew – shop around if your policy is close to expiring. Don’t just let it auto-renew as you could find the same cover cheaper with a different provider. Or alternatively ask for a better price if you like your current provider.