The average cost of buildings insurance for homeowners increased by 1% last year, 

bringing the cost of a year's insurance to little over 205. Contents insurance also 

increased, this time by 2%; the typical homeowner now pays 151 for it each year. 

Norwich Union, for instance, increased its costs by a staggering 6% last year, while 

other lenders are raising prices even more.

 

The query is, "Why?" Since there is so much rivalry, you might anticipate prices to be decreasing rather than rising, but as we will describe later, there are other forces at play.
 

No. 1: The price of repairing or rebuilding a dwelling.

Prices are rising when the insurance company estimates how much it would cost to 

restore your home since labor and building supplies are becoming more expensive. 

This is a result of inflation, which also has an impact on the insurance company's 

operational expenses. Naturally, insurers must take these costs into account because 

wages, bills, and office rent are all rising year.

No. 2: The climate

Whether it is caused by global warming or not, the British weather is becoming more 

and more erratic. However, it is true that during the past several years, we have seen a 

lot of extreme weather. The hurricane of 1987 was an unusual occurrence, but flash 

floods like the ones that occurred in Carlisle, Boscastle, and Helmsley, North 

Yorkshire, are becoming more frequent. According to the Association of British 

Insurers, the average insurance claim for flood damage might be between $15,000 and 

$30,000, significantly cutting into the earnings of the insurance sector. Floods actually 

cost insurance companies millions of dollars each year.

Number 3: Burglary

 urglary claims have increased over time and currently average over 1,400. The two main causes are: 

Our homes are filled with expensive electronic devices that may be bought new for a 

high price and then sold for a high price, including digital cameras, laptops, game 

consoles, and ipods. These valuables are being sought after by burglars, which is 

hurting the insurance sector financially.

 

Burglars choose affluent areas to ensure they get away with the best goods; as a result, 

the value of these types of claims is rising as expensive items like jewelry are taken.

To determine premiums for everyone in a postcode region, insurance firms use facts 

pertaining to that area. You will have to pay higher rates if your neighbors have 

experienced subsidence or if the region is close to a river that has been known to flood. 

Similar to this, it will be considered that you are more likely to file a burglary claim if 

people in your neighborhood have had their homes broken into.

A no-claims discount can help offset the annual increase in premiums, but once you 

have gone five years without filing a claim, the insurance company caps these 

reductions, and you are no longer eligible for them.

Is there a way to stop the price of home and contents insurance from rising?

You should start by shopping around for the best bargain. For the best offers, check 

the Internet because most insurance providers provide consumers who purchase 

online a discount, typically 10%. If you pay with a direct debit, you will also save 

money. Although it may be tempting to accept the renewal estimate provided by your 

existing insurance, make the effort to shop around will be worthwhile in the long run. 

This is due, in part, to the fact that insurers always reward new clients with the best 

offers, thereby penalizing loyal old clients!

Another great approach to lower rates and gain vital piece of mind is to increase home 

security. There will be a difference if there are neighborhood watch programs, 

exterior security lighting, a burglar alarm, security locks on windows, and industry-

recognized locks on exterior doors. Installing these items obviously costs money, but 

they ultimately pay for themselves.

Play the insurance company game, and you'll always come out on top. Shop about, be 

ready to switch insurance providers every year, and refuse any high costs. There is 

always a better offer available!