Home Insurance | Your Premium Explained

Why are insurance prices rising?

It’s no secret that insurers are dealing with growing claims costs and our average prices have had to rise so we can continue to offer you the best possible service. Find out more about this and what we’re doing about it here:

Car insurance renewal prices
Home insurance renewal prices

Rising cost of premiums… did you know?

As the cost to buy things like mobile devices, video games, wooden floors and sofas increases, so does the cost to replace them.
Buildings claim costs have also increased due to house prices rising by 22% since 2019.
Home insurers paid out £2.5 billion to help customers cope with severe weather events in 2022 - one of the worst years on record. Prices reflect how likely it is to happen again and how much claims would cost.

When calculating the cost of your home insurance, we look at a range of different factors. In this video we’ll explain what we take into account and how it affects the price.

View video transcript

Wondering how LV= work out the cost of your home insurance?

When we calculate the price of your home insurance, we assess detached, semi-detached and terraced houses differently, just as we do with flats and other types of homes. We also take the size of your properly into account, so the more rooms and bedrooms in your property, the higher the cost will be to rebuild your home or replace your belongings.

The materials used to build your home can also impact your premium. For example, homes with flat roofs have an increased risk of storm or water damage so insurers may charge a higher premium to cover them.

The area you live in can affect your home insurance cost too. Typically, if your home’s in an area that’s prone to flooding, you may be more likely to make a claim.

We also look at the likelihood of severe weather conditions happening in the future and how many of our customers may be affected. Extreme weather can cause damage to homes and increase the number of insurance claims for things like burst pipes or flooding.

Changes introduced by the government can sometimes have an effect on your home insurance price too. For example, the Flood Re scheme, introduced in 2016, is designed to help people living in flood-risk areas to get a home insurance quote. Government changes to tax rules can also affect your premium price. If Insurance Premium Tax increases, your annual price goes up too.

From TVs to state-of-the-art kitchens, your fixtures, fittings and belongings are becoming more expensive to replace. What’s more, rising labour costs mean it’s also getting more expensive to fix these items, which can increase the cost of providing home insurance and the price you pay.

We settle thousands of home insurance claims every month, so if the number goes up due to things like increased accidental damage claims or extreme weather events, the cost to insure your home could also go up even if you haven’t made a claim yourself.

We’ll need some details from you when you get a quote. These include:

Personal information such as details of any claims you’ve made in the last 5 years
Property details such as what the walls and roof are made of, how many bedrooms there are and when the property was built.
Details of any personal belongings you need cover for such as valuables, bikes etc.

We’ll send you a renewal invite 30 days before your policy is due to renew and we’ll make sure your renewal price is the same or cheaper than if you were a new customer with a like for like policy with us.

So you can join the 7 million customers we currently insure and be confident we’ve got you covered.

The building materials your home is made from

The way your property has been built and the materials used can impact your premium. For example, homes with a timber frame or thatched roof have an increased risk of catching fire, so your insurer has to charge a higher premium to cover them.

Where you live

The area you live in has a bearing on the cost of your home insurance. Typically, if your home's in an area which is prone to flooding, you may be more likely to make a claim. This will be reflected in your insurance price. The same applies if you live somewhere with high levels of theft crimes - you'll normally pay more for your home insurance.

The type of building you live in

Icon of a house. Next to the house is a tall building.

We assess detached, semi-detached and terraced houses differently, just as we do flats and other types of homes. We also take the size of your property into account - the more rooms and bedrooms in your property, the higher the cost will be to re-build your home or replace your belongings.

Government initiatives

Icon of a large building and a lightbulb

Changes introduced by the government can sometimes have an effect on your home insurance price. For example, the Flood Re scheme, introduced in 2016, is designed to help people living in flood-risk areas get a home insurance quote. The scheme also helps insurers pay out when the homeowner makes a valid claim for flood damage. In return, insurance companies signed up to the scheme must pay premiums and an annual levy to Flood Re to fund the scheme.

Government changes to tax rules can also affect your price. If Insurance Premium Tax (IPT) increases, your annual price goes up too.

The costs of repair and labour

From TVs to tablets and state-of-the-art kitchens to lighting, your fixtures, fittings and belongings are becoming more expensive to replace.

What’s more, rising labour costs mean it’s also getting more expensive to fix these items, which can increase the cost of providing home insurance and the price you pay.

The number of claims being made

We settle thousands of home insurance claims every month. If the number goes up, due to things like increased accidental damage claims or extreme weather events, this could mean the costs to insure your home could go up.

Severe weather

Icon of a house. On one side it is snowing and on the other side there is a storm

Long periods of cold weather or rain can cause damage to homes and increase the number of insurance claims for things like burst pipes.

When we calculate your home insurance price, we look at the likelihood of severe weather conditions happening in the future and how many of our customers may be affected.

Your home insurance premium explained