If you already have a home insurance policy that is close to ending, your home insurance provider is likely to offer you a renewal quote. Read our guide to make sure you avoid paying too much on your home insurance renewal
The cost of home insurance is rarely getting cheaper because more claims are being made and so the risk of insuring homes increases. Home contents insurance providers measure everything on data analysis of risks and general trends, so if you do get offered a home insurance renewal quote it is likely that you will be paying more than you did in the first year of your policy.
You will probably be getting the same level of cover but paying a higher premium for it. Shopping around for home contents insurance the first time around might have been a pain and once you settled on the policy you felt was right for you it probably felt like a relief rather than an easy task.
So when it comes to the time when your current home insurance policy is about to end, it will be tempting to simply renew your policy with the current provider. This will save you time and make it more convenient as you will have one less thing to deal with when it comes to doing your regular financial admin.
However, spending a little extra time to shop around and do your research could save you money, so it’s important not to fall for the trap of just accepting the first home insurance quote you get. You wouldn’t have done it the first time you shopped for home contents insurance, so you certainly shouldn’t do it the second time around.
How much does home insurance renewal cost?
So how much does home insurance cost when you take up a renewal quote from your current provider? This can depend on your circumstances and if you made any claims in the first year.
For example, if you decided to quit your job and become self-employed and thus turned your home into a place of business, this would be a ‘material fact’ that would impact the cost of your home insurance renewal quote. In some ways it could reduce the cost as you could claim that you would be home during office hours and thus lower the risk of being burgled during the day. In other ways this could raise the price of your home insurance because there’s office equipment to insure on top of your other possessions and you get more visitors during the day, adding risk of damage or theft to your property.
If your buildings insurance is up for renewal then your circumstances changing could also impact the price of your renewal quote. For example, if you fitted a new kitchen or built an extension to the back of your house or converted the loft, this would also be a material fact that would need to be declared. Generally home improvements increase the cost of your home buildings insurance, so you would expect to see an increase in your renewal quote.
Finally, if you made any claims in the first year then it is highly likely that your home insurance quote will increase when it is time for renewal. This is due to the fact that the insurer now sees your home as a bigger risk to insure. To offset this risk, you will have to pay more in premiums and possibly more on your excess.
If you have a no claims discount then you could find your quote goes down or stays the same on your renewal.
Some insurance companies will allow you to transfer your no claims years to them so you could still get a discount elsewhere if your current insurer is offering you an expensive renewal quote.
Unfortunately with home insurance it rarely pays to be loyal with the same company. In some cases, home insurance customers who had not made any claims and had no changes to their circumstances found that their home insurance renewal quote was 20% to as much as 40% higher than the previous year, with it only going up each year. So it’s important to shop around regardless of any no claims discount potentially being offered.
Sometimes the price you get in the first year of your home insurance policy is simply cheaper as a result of discounts. In an effort by the insurer to bring new customers in, they might have been offering you an attractive discount. Unfortunately, this means that in the second year you could be offered the ‘real’ prices on your home insurance with the discounts taken away.
Either way, be sure to shop around as you can still get discounts on your home insurance, even in your second, third or fourth year. It’s always likely that you could find discounts available to new customers or customers transferring their no claims discount to a different home insurance provider. Read on to learn more on how to find cheap home insurance when it comes to getting a renewal quote.
How to get cheap home insurance
Using a comparison website to search for home insurance is one of the easiest and most convenient ways of finding cheap insurance deals. Many companies are prepared to offer deeper discounts online and especially to new customers. Loyalty rarely pays when it comes to being a home insurance customer, so do not be afraid of jumping ship the minute you do not like the quote being offered to you by your current insurance provider.
If you made a claim in the previous year it is likely that another insurance provider will take this into consideration, so being a new customer does not mean having a completely new slate.
Having said that, the new home insurance company will still want to get a new customer and take away a customer from one of their rivals, so it’s still worth shopping around for a better deal.
Use our comparison tools to help you find a better deal than your home insurance renewal and see if you can save money on your home insurance.
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