AVERAGE HOME INSURANCE COST: Best 2023 UK Practices and Rates (Updated)

Homeowners insurance is an important part of your financial strategy since it protects your assets in the case of a covered loss. You might be wondering, however, how much does homeowners insurance cost per year. In this article, we'll discuss how much an average home insurance cost in the UK and insurance cost to rebuild.

Homeowners insurance is an important part of your financial strategy since it protects your assets in the case of a covered loss. You might be wondering, however, how much homeowners’ insurance costs per year. In this article, we’ll discuss how much average home insurance costs in the UK and how much it costs to rebuild.

According to 2021 statistics from Quadrant Information Services, the average cost of homeowners insurance in the United States is $1,312 per year, or roughly $109 per month, for a policy with $250,000 in dwelling coverage. After a covered loss, dwelling coverage pays to repair or rebuild your house, up to $250,000 in this scenario. If you have a mortgage or another type of home loan, you are responsible for obtaining homeowners insurance. Home insurance is a wise investment, even if you own your home outright.

Home Insurance Cost

The cost of home insurance has risen significantly across the country. Home insurance prices have risen by about 47 percent in the previous ten years, according to the National Association of Insurance Commissioners. The average cost of homeowners insurance is $1,445 per year.

Home insurance costs an average of $1,585 per year, according to research. This, however, is only a starting point. The cost of your home insurance, the size of your home, and the amount of coverage you require are all heavily influenced by your location.

The average cost of homeowners insurance in the United States is $1,445 per year and $120 per month, however, the cost of coverage varies greatly depending on state legislation, your home’s location, and the cost of rebuilding. Although rates vary substantially by state, they range from $598 per year in the least costly state to $2,559 per year in the most expensive.

Average Home Insurance Cost Uk

According to data from the AA’s British insurance premium index for the second quarter of the year, the average cost of home insurance in the UK is £163. This is up 3.8 percent from the previous year. Depending on your circumstances, you may pay more or less than that.

Some of them may even be able to offer you a discount on your coverage. Based on two different investigations, we’ve looked at the average cost of home insurance in the UK as well as the factors that influence the cost of insuring your property.

How Much Does Home Insurance Cost UK?

In the second quarter of 2021—April, May, and June—home insurance premiums decreased somewhat. Since Q3 2020, the average price of combined buildings and contents insurance has decreased each quarter to £140. Despite this downward tendency, prices are just 4% lower than they were in Q2 2020 (£146).

Premiums for homeowners insurance are decreasing, a typical yearly combined buildings and possessions policy cost a little under £116* at the end of 2016. By mid-2020, it had slowly risen to £146, but prices have since fallen 0.1 percent in Q3 2020, 1.2 percent in Q4 2020, 2.1 percent in Q1 2021, and currently 0.5 percent in Q2.

From Q3 2016 to Q1 2017, prices have declined for three consecutive quarters for the first time. Buildings-only policies have also decreased every quarter since Q3 2020, and they are now lower than they were in 2020 at this time. Year on year, average prices fell 1.4 percent, from £112.59 to £110.97.

The most substantial drop in Q2 2021 was in content-only premiums, which fell from £61.48 to £57.04. (-7.2 percent ). This also marks a 14.2 percent year-on-year drop from £66.49 in Q2 2020. Because insurers often give a discount on premiums to customers who buy both buildings and contents at the same time, combined plans don’t usually reflect changes in individual buildings and contents policies.

With the average UK household possessing £35,000 in possessions, it is critical to preserve them, and it may be less expensive than you think. According to MS, the typical combined home and contents insurance coverage will cost £141 per year in 2021. That works out to just £2.71 each week.

Home Insurance Cost to Rebuild

If your home was wrecked beyond repair, the rebuild cost is the amount it would take to entirely reconstruct it. It takes into account the cost of labor and materials. This cost is frequently less than the sale price or market value of your home. You will avoid over-insuring and paying higher premiums if you base your coverage on the rebuild cost of your property.

Your home’s rebuild cost may be more than its market value if it is of non-standard materials (not brick-built) or has unique architectural characteristics. To avoid any insurance shortages, insure your home against the higher rebuild cost rather than the lower sale price or market value.

Why Is It Important to Have Accurate Replacement Costs?

Consider the following terrifying scenario: Your home is completely destroyed by fire. Fortunately, fire is covered by most policies. Your home will cost $250,000 to rebuild based on current labor and construction expenses. Your home insurance policy only covers a replacement cost of $200,000, which is unfortunate. That implies you’ll need an extra $50,000 to rebuild your home.

This is a harsh reality that many homeowners endure. That’s why getting a precise replacement cost is critical. However, there is some subjectivity in replacement costs. It’s possible that your calculations differ from those of your insurance. It’s critical that you double-check your insurer’s findings.

Calculating the Cost of a Rebuild

Remember that replacement cost does not include your mortgage, the market value of your property, or the cost of the land. It solely considers the cost of rebuilding your home, which includes both materials and labor.

Here are different methods for calculating your rebuild, cost if you possess a normal brick-built home:

  • Use the House Rebuilding Cost Calculator from the Building Cost Information Service.
  • enlist the services of a professional surveyor to conduct a thorough inspection.
  • If your home is composed of unusual materials, has unique architectural characteristics, or is located in a historic district, get guidance from a professional surveyor.
  • Any professional fees related to the rebuild, as well as the cost of removing the site, should be factored into your reconstruction budget.

Make your own calculations

With basic back-of-the-napkin calculations, you can get a decent approximation of the replacement cost of your home. To begin, determine the average cost of building per square foot in your city. Here, a local contractor or building firm can assist you.

For example, the average building cost per square foot of your home is $150. Consider the average size of a new home in the United States: 2,687 square feet. According to calculations, rebuilding such a home would cost around $400,000.

When calculating the rebuilding expenses, you must also evaluate the quality of your property. Do you have custom hardwood floors, high-end appliances, and marble countertops in your home? Rebuilding a home with carpet, aged appliances, and laminate countertops will almost surely cost more.

It’s still a good idea to do the math even if your estimate isn’t exact. Request a breakdown if your equation differs significantly from your insurer’s. The insurance company can provide you with a full report detailing how they arrived at your replacement cost.

Make use of a calculator

Insurance companies and appraisers utilize software to determine the replacement cost of a home. Several of these tools and services can be found on the internet. A replacement cost calculator is an excellent tool for double-checking your insurance company’s estimate.

Hire a professional appraiser

Hire a professional if you’re worried about your math skills. Professional appraisers are capable of precisely determining the worth of a residence. They know everything there is to know about property prices, construction expenses, and real estate.

An unbiased appraisal of your home’s value can be provided by an independent appraiser. Local appraisers are aware with construction and labor market prices, as well as local building codes. They will do a thorough inspection of your home in order to compile a detailed report.

Hiring an appraiser has a wide range of costs. A good rule of thumb is that a good-quality appraisal should cost at least a few hundred dollars. If you recently purchased a home, it was most likely appraised before to closing. To learn more, contact your real estate agent.

Home Insurance Cost to Rebuild your Home

Don’t assume that the market value of your home is the same as the cost of replacement. The market value of a home takes into account supply and demand as well as the worth of the land. The cost of building (or rebuilding) a house from the ground up, on the other hand, is known as replacement cost. You should purchase adequate replacement cost coverage to rebuild your home completely.

Worried about the cost of a replacement being insufficient? If this is the case, you have the option of purchasing guaranteed or extended replacement cost coverage. It pays for exorbitant repair and rebuilding costs. It’s usually a defined proportion of your replacement cost, ranging from 10% to 25%. There are however a few things to note;

  • Have you made any repairs, remodels, or updates to your home? Any changes you make to your home can affect the cost of reconstructing it.
  • Maintain control over your home’s papers. Keep all manuals, receipts, photos, and other relevant documents connected to appliances and household work in a safe place.
  • Make changes to your inventory list.
  • Make certain that any special goods, accessories, or constructions are covered. If not, consider adding an insurance rider to your policy.

Steps to take next

  • Contact a professsional surveyor or use the Building Cost Information Service’s house rebuilding cost calculator.
  • Each time you renew your insurance, take a look at the cost of rebuilding your home.
  • Recalculate the home insurance rebuild cost and chat with your insurer to ensure you are completely insured if you modify your home or add an addition.


Your insurer may determine the replacement cost of your home when you buy home insurance. Most businesses use public data, as well as their own market research and construction algorithms, to evaluate replacement costs. Their agents assess the cost of replacement using proprietary software. An insurance provider, on the other hand, is unlikely to conduct a physical inspection of your home. As a result, inaccurate valuations are possible.

You should double-check your insurer’s math when they give you a replacement cost estimate. If you don’t, you can end up with insufficient coverage. One of the most costly mistakes you can make is underinsuring your property. Unfortunately, it’s also a common blunder.

Frequently Asked Questions

What determines the cost of homeowners insurance?

The cost of homeowners insurance is affected by a number of factors, including where you reside, the risk rating of your house, and the amount of coverage you select. Our research discovered that dwelling coverage and location are two of the most important criteria.

How much is home insurance a month on average?

Home buildings and contents insurance in the UK costs roughly £29 per month, which is about 9% higher than if you pay upfront. What is the definition of a home insurance premium? The amount you pay your insurance provider to cover your home and/or valuables against fire, theft, and/or damage is referred to as a home insurance premium.

Does insurance pay for rebuilding a house?

If your damaged home was insured, you have the right to collect all benefits that would have paid the cost of rebuilding your home and use them to buy a replacement home instead. Insurance companies are required law to pay the same amount they would if they were paying cash.

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