What's happening to home insurance premiums?

The average cost of home insurance dropped by just £1 in the first quarter of 2025, figures from the Association of British Insurers (ABI) show.

The annual cost of combined buildings and contents cover remains largely unchanged after claims for weather-related damage to homes and possessions hit an all-time record £226m from January to March this year.

Here, Which? takes a closer look at the price of home insurance, why claims costs are rising and how to pay less for your premium. 

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What's happening to home insurance prices?

The ABI's latest report shows that the average price for a combined policy fell to £393 in January to March 2025, down from £394 in the last quarter of 2024 (October to December). 

Compared with the same period in 2024, however, premiums have increased by 7%. 

Released every three months, the ABI's data gives the most accurate picture of the market as it's based on prices consumers are actually paying, rather than quotes, and combines both renewals and new policies.

This chart shows how the average cost of a home insurance premium has changed since January 2022.

• Find out more: how to find cheap home insurance

Why is the cost of home insurance so high?

The latest ABI figures show that insurers paid out £1.5bn in claims in the first three months of 2025 – £170m more than the same quarter last year.

Bad weather continues to be the main driver behind the increase in claims payouts, with costs adding up to £226m. That's 55% more than weather-related payouts in the last three months of 2024 and the first time ever that the figure has topped £200m.

In January, the UK was battered by Storm Éowyn, which the Met Office described as the UK’s most powerful for more than a decade.

• Find out more: does home insurance cover flooding?

Ways to save on home insurance

The cost of home insurance may be rising, but there are several ways to mitigate any premium price hike:

1. Shop around

This should always be the first thing you do. But with so many options, choosing an insurer can be hard. 

Price comparison sites that allow you to view multiple quotes at a glance are a good place to start. The main ones for insurance are Compare the Market, Confused.com, GoCompare and MoneySuperMarket.

To get a clearer idea of how different home insurance policies compare, you could also see our guides to the best contents insurance and buildings insurance. We've rated policies from dozens of insurers to help you choose the right cover.

But remember, not all providers are on there. Which? Recommended Providers Direct Line and NFU Mutual are examples of this. 

2. Don't automatically renew

Never agree to the auto-renewal clause included in your 12-month home insurance agreement. This means that once your initial one-year contract lapses, you will be automatically enrolled for another year.

Instead, use the best quotes you've gathered to negotiate with your insurer and take your business elsewhere if it doesn't improve its offer.

3. Renew early

If you leave arranging home insurance until the last minute, generally speaking, insurers are likely to charge you more than if you bought the cover a few weeks in advance of it starting.

Try buying your insurance weeks (rather than days) ahead of the policy going live. 

4. Pay annually

Paying by the month for your cover can make it more manageable within your budget, but it's usually the most expensive option overall.

When paying monthly, you're effectively borrowing the year's premium to repay in instalments. This typically comes with interest, hiking the overall cost.

5. Cheaper isn't always better

Opting for the very cheapest policy you find won't necessarily save you money in the long run.

If your policy comes with steep excesses or significant exclusions, you'll feel the pinch when it's time to claim. This means it's vital that you check the policy details carefully before buying the cover. 

• Find out more: how to find cheap home insurance

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This article is regularly updated with the latest figures from the ABI and other home insurance indices. The ABI occasionally adjusts previously published figures when updated data becomes available.