- Around 1 in 10 (9%) UK adults say they have no type of home insurance policy currently in place. And money worries could be the main reason why, as more than half (59%) of these say it’s because they can’t afford it.
- But how much does home insurance actually set you back? Monthly costs could be as little as £18, on average, according to Confused.com(2). That’s cheaper than the average monthly costs of non-essentials, such as smoking and eating out.
- And making small sacrifices could pay off in the long run. That’s as 1 in 3 (33%) have made a claim in the past and had £1,154 from their insurer to cover damages and repairs, on average.
- Matthew Harwood, Confused.com home insurance expert, shares tips on how to keep costs low and not risk being unprotected.
Millions of households across the UK could be at financial risk due to their occupants leaving them unprotected(1).
That’s as new data gathered by Confused.com reveals how 1 in 4 (25%) adults admit to having little or no home insurance. In a recent survey, 2,000 UK adults were asked about their current spending habits to see how some could be putting themselves at financial risk. According to the research, around 1 in 10 (9%) said they have no home insurance policy in place in the property they currently live in. And with more than 28 million homes currently in the UK, millions of people could find themselves out of pocket if something goes wrong.
Being insured can help to cover costs for things like theft, damages, repairs and even flooding. But it seems that some aren’t willing to protect themselves and the latest data reveals how it could be because of the current financial climate. That’s as more than half (59%) of people surveyed said it’s because they simply can’t afford to buy an insurance policy.
But how much does home insurance actually cost? According to Confused.com, it could be cheaper than you first think. When looking at a combined buildings and contents insurance policy, the average monthly cost is around £18(2). And if paying annually, the average cost is around £193. This is a savings difference of around £18 when comparing monthly instalments vs upfront costs. It’s common to see annual prices coming in cheaper than monthly options because monthly payments often include an interest charge. This means policyholders could be paying slightly more overall for the privilege of spreading out their payments over the year.
According to Confused.com, these are the current UK average prices for home insurance:
| Average monthly costs | Average yearly costs | |
|---|---|---|
|
Buildings & Contents insurance (combined policy)
|
£18
|
£193
|
|
Buildings insurance (standalone policy)
|
£14
|
£158
|
|
Contents insurance (standalone policy)
|
£7
|
£74
|
And the data from Confused.com also shows a noticeable difference in savings when it comes to a combined vs separate policy. To be financially savvy, especially in the current climate, Confused.com recommends a combined policy. And, if possible, pay annually to maximise savings. Data shows policyholders could be around £39 better off if paying upfront for a combined home insurance policy, rather than paying monthly for separate policies.
Compared to how much people spend on non-essential or ‘luxury’ items each month, research found that some monthly expenditure is costing more for people than insurance. In fact, Brits seem to be spending a lot more. According to survey data, these were the top monthly expenses for Brits:
- Cigarettes / vapes - £70
- Gym memberships - £68
- Eating out - £66
- Buying alcohol - £59
- Clothes - £55
For some people, these items might not be essential, but they are part of everyday life. Especially over the past few years where times have looked rather bleak in parts. But choosing not to pay for protection could leave people in a worse position later on, if they need to ever make a claim.
And when comparing this to Confused.com’s data, it’s evident that insurance could cost a fraction of the price in comparison to non-essentials. But there are of course instances where separate policies are more appropriate. For example, those living in social or privately-rented accommodation don’t normally need buildings insurance. And according to the latest UK census, that could be as much as 9.2 million(3) people. But that doesn’t mean they should avoid covering themselves with contents insurance if the other isn’t required. That’s because contents insurance can cover things like personal possessions and furnishings, all of which could be expensive to repair or replace.
And the latest research also proves how small investments could mean a better payoff if anything was to go wrong. Confused.com found that 1 in 3 (33%) have had to make a claim on their home insurance in the past. Around 2 in 5 (43%) had claimed for replacing or repairing possessions as a result of theft, loss or damage. And more than half (51%) claimed for structural or cosmetic damages. In total, insurers paid out £1,154, on average, for any claims made. Based on the total claims made, more than 4 in 5 (81%) said the payout was enough to cover the full cost of the claim made.
But there’s no avoiding the fact that cost of living pressures are hard on the majority of people in the UK right now. Research by Confused.com found that almost 1 in 3 (31%) are only spending on things that are absolutely essential to them. And almost 1 in 4 (23%) say they’re also worried about paying bills and buying essential items during the financial crisis. So with this in mind, it might seem sensible to only pay for the bare minimum when pennies are being stretched. And with home insurance not a legal necessity, unlike car insurance, it could be the last thought for many. In fact, more than a third (36%) said that buying a home insurance policy just isn’t a priority for them at the moment. But paying for insurance cover doesn’t have to be expensive. And making small sacrifices could help in the long run.
Matthew Harwood, Confused.com home insurance expert comments: “Home insurance can protect you against things like theft, subsidence and fire. It can be vital for those who live in high-risk areas, where things like bad weather can damage property, for example.
“But as it’s not a legal requirement, some people might not see the point in buying a policy. Especially if they feel they’ll never have to make a claim. But as our latest research revealed, having this protection in place could save you a small fortune if anything was to go wrong. And the good news is, policies don’t need to be expensive either.
“There’s lots you can do to keep costs down for looking for a quote. If you can, you should:
- Consider a combined policy
- Increase your voluntary excess amount
- Improve your home security
- Build your no-claims
- Pay annually
- Get a joint policy
“And don’t forget to shop around! Comparing prices before buying a new policy is the best and only way to ensure you’re getting the cheapest deal.”
ENDS
Media information:
Confused.com press office:
Launched in 2002, Confused.com was the UK's first digital marketplace for car insurance and is one of the leading brands in the sector, generating over one million quotes per month. It has expanded its range of comparison products over the years to include home insurance, van insurance, motorcycle insurance, and car finance comparison, as well as a number of tools designed to save consumers money.
Confused.com is not a supplier, insurance company or broker. It provides an objective and unbiased service. By using cutting-edge technology, it has developed a series of intelligent web-based solutions that evaluate a number of risk factors to help customers with their decision-making, subsequently finding them great deals on a wide-range of insurance products, financial services, utilities and more. Confused.com’s service is based on the most up-to-date information provided by UK suppliers and industry regulators.
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