Market analysts Consumer Intelligence also found the average quoted premium for a combined building and contents policy increased by 6.7% in the year to April 2023.
More expensive premiums means it's more important than ever to choose the right policy for your circumstances. Here, Which? takes a closer look at what’s behind the price hike and gives tips on how to find the best cover.
Why are premiums more expensive in 2023?
The average combined buildings and contents policy was £315 in the first quarter of 2023 - that's £17 more than in 2022 and up by £10 compared with the previous quarter.
The increase, however, is less than the rate of inflation over the past year. That's despite surges in weather-related claims and more expensive building materials.
During 2022, home insurers paid out £2.5bn to help customers cope with unexpected events, such as storm damage, according to ABI's insurance premium tracker - a survey that looks at the prices customers paid for cover, rather than quoted.
New Financial Conduct Authority (FCA) rules introduced on January 1 2022 stop insurers offering better deals to new customers than those offered to renewing customers. But they do not set or cap the level of premium paid by new or existing customers.
The price of cover therefore will continue to reflect a range of factors, including the cost of settling claims, the ABI said.
Find out more:What does a good policy look like?
Choosing a home insurance policy can feel like a minefield of options. From deciding how much cover you need to setting the right level of excess. Here are five of our top tips to help you make a decision:
1. Check our Best Buy picks
Best Buys are awarded to policies that stood out in our analysis as offering particularly high levels of cover and, after surveying thousands of customers and scrutinising 78 policies, we gave the endorsement to 24 buildings and contents products.
2. Think about the excess
Insurance excess is the amount you have to pay towards the overall cost of an insurance claim. Your insurer will then contribute the rest – up to the limit of the cover.
It's usually a pre-agreed sum that is set at the point of purchasing a policy. The greater the excess, the cheaper the premium, but it's important you consider how much of a claim you could comfortably afford to pay yourself.
Find out more:3. Set the right amount of cover
Examine the policy carefully to ensure you are not paying for anything unnecessary. For example, not everyone needs both building and contents insurance. If you do need both, some insurers will offer a discount when you buy combined cover.
To work out exactly how much cover you need, it's important to calculate the value of your home contents and how much it would cost to rebuild your home. If these figures are too high, you will pay more than you need for your home insurance. If they are too low, you could be left out of pocket if you need to make a claim.
4. Is the price right?
If you have done all your research and found the right policy for your circumstances, then it is time to look at the price tag. Of course, cheap doesn't always mean best but it has to be affordable for your budget. If your policy is up for renewal and you feel it's still a little too expensive, then you can try haggling with the insurer for a lower price.
We surveyed 14,408 Which? members who renewed or switched car or home insurer between May 2021 and June 2022. Of the members who discussed their premium with their insurer, 48% were able to get their price reduced.
But you don't need a PhD in bargaining to get companies to budge on their premiums - sometimes all it takes is a friendly phone call and asking for a better deal. If that fails, that's when all the knowledge gained from shopping around comes in handy. Give them some examples of better offers elsewhere and try to negotiate. Of course they might say no - in which case, you're free to switch to one of their rivals.
5. Seek specialist help
Customers who live in non-conventional properties or homes with unusual problems may need to look further afield for the right policy. For example, if you live in a thatched cottage or a house affected by subsidence.
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source https://www.which.co.uk/news/article/home-insurance-jumps-6-how-to-get-the-best-policy-and-price-a040Y5I3kxQg