What are some of the reasons for rising home insurance costs?
- Building materials: Inflation, high demand, and global supply chain issues saw the cost of materials increase by over 30% from 2020 to 2023 (source: Consumer Price Index).
- Replacing belongings: As the cost to buy things like mobile devices, video games, wooden floors and sofas increases, so does the cost to replace them.
- Property value: Buildings claim costs have increased due to house prices rising by 22% since 2019 (source: ONS).
- Weather events: UK insurers are seeing a lot more claims due to an increase in the frequency and severity of events like storms, floods, subsidence, fires & burst pipes.
- 2022 was one of the worst years on record: Home insurers paid out £2.5 bn to help customers cope with severe weather events (source: ABI). Our pricing has to factor in how likely it is to happen again and how much claims would cost.
We use the vast majority of your premium doing what we do best, looking after our customers in their time of need. 84% of all LV= home premiums went towards paying for people's claims. We're incredibly proud of this and it's something we'll continue.
Existing LV= Home customer? When your renewal's generated, we’ll compare your quote to a new customer's price for a like-for-like policy to make sure you’re paying the best price we can offer.
Why is my price different to last year?
If your quote's different to last year you might be wondering why, especially if you’ve not made a claim. Even if you’ve not moved house, bought a new car or changed your cover level over the last year, your property or vehicle is a year older now which makes a difference to your quote. Here are a few more things to consider…
The number of claims being made
We settle thousands of home insurance claims every month. If the number goes up, due to things like accidental damage or extreme weather events, this could mean your insurance goes up too.
Long periods of cold weather or rain can cause damage to homes and increase claims for things like burst pipes. When we calculate your price, we look at the likelihood of severe weather conditions and how many of our customers may be affected.
Where you live
The area you live in affects the cost of your home insurance. Typically, if your home's in an area prone to flooding, you may be more likely to make a claim and your price will reflect this. It's the same if you live somewhere with high levels of theft.
Cost of repair and labour
From TVs to tablets and kitchens to lighting, your fixtures, fittings and belongings are becoming more expensive to replace. Rising labour costs are also making it more expensive to fix these items, which can increase the cost of providing your insurance.
The type of building you live in
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, the higher the cost will be to re-build your home or replace your belongings.