The cost of home insurance is set to “soar” during the course of 2017. So predicted Money Wise magazine, attributing price increases to two major influences:

  • the weakened exchange rate of the pound, which makes imported building equipment and materials more expensive; and
  • the increase that was made with effect from the 1st of June 2017 in the rate of Insurance Premium Tax (IPT) – now charged at 12%, compared to just 6% as recently as October 2015.

Against this background of rising prices, however, it may still be possible to reduce your expenditure on home insurance premiums.

Value for money

Reducing premiums need not mean sacrificing essential insurance cover for your home.

As ever, it is unlikely to be a question of finding the cheapest cover available, but securing good value for money. This means identifying the home insurance cover you need – from listings of literally thousands of choices – at a competitive price.

It is a search that may prove very time-consuming and laborious – even then, leaving you at risk of having missed some especially suitable deal.

Consulting a specialist home insurance provider, therefore, may make even greater sense now – to ensure you are paying a competitive price for cover that continues to provide essential cover.

Building insurance

The total building sum insured needs to cover the cost of rebuilding your property if it is destroyed in some major incident.

Be wary of over-estimating that cost and over-insuring the property, however, since that results in your paying higher premiums than are necessary. You may want to consult a chartered surveyor to conduct such a valuation – for a fee, of course – or update any existing valuation with reference to the index of building costs published by the Royal Institute of Chartered Surveyors (RICS).

Contents insurance

The tendency is for some homeowners to underinsure when it comes to the other twin cornerstone of property insurance, contents insurance.

It is important to have a detailed inventory of the whole contents of your home – conducted on a room by room basis – to ensure that the valuation produces a total sufficient for the repair or replacement of lost or damaged items.

Don’t forget to include the “smaller’ items such as a CD collection or kitchen equipment too  – the costs to replace these could actually add up to quite a lot.

You may be given the option of policies which settle claims either on a replacement, new for old basis or after the deduction of an allowance for wear and tear. Although the latter may save you money in terms of the premiums you pay, you end up paying more if you need to make a claim and need to make your own contribution towards the difference between a depreciated price of any item and its current replacement cost.


A classic way of reducing premiums may lie in agreeing to a voluntary excess over and above the compulsory excess likely to be attached to particular types of claim – compulsory excesses may already differ, for example, with higher amounts for escape of water or for subsidence.

By agreeing to a higher excess, you are increasing the uninsured risks – so may typically reduce the cost of premiums you need to pay.

Pay annually

Home insurance is written on an annual basis and this determines the premium paid.

Although you may be offered the apparent convenience of paying by monthly instalments, in some cases you can reduce the total amount paid for the year by paying the full amount in advance.

In summary, while your home insurance premiums may typically increase this year, even if you haven’t made a claim, there are ways to cut these costs by using the points mentioned above.