Why Do Home Insurance Prices Change Each Year?

Why do home insurance premiums go up each year?

We explain some of the many things that affect the cost of your home insurance every year. Some of these changes might be driven by you and your home, but there are other factors too.

Published - 2 Feb 2023

Insurance is all about risk, so insurance providers constantly analyse and assess every single thing they can to evaluate this risk.

That's why it's so important to keep your details as up to date as possible, which you can do at your MySaga account. This also means that when we send you a renewal or give you a quote, we can give you the best price we can.

Let's take a look at some of the obvious and not-so-obvious aspects your insurance underwriter takes into account when coming up with your premium.

Any changes to your circumstances or home situation can have an affect on the price you pay. Here are some examples:

Change of address

If you've moved house, whether to the next postcode or the next county, many factors can change. Crime rates and the number of claims per household, as well as the house type, can all adjust your price.

Changes to your property

If you've added an extension or converted and increased your number of bedrooms, this can change your property value or its rebuild costs. In turn this could affect how much you pay for your insurance.

How busy your home is

Changing from full-time employment to part-time or retired means you are at home more. On the plus side, there's less chance of break-ins, but the downside is that there's more opportunity to damage things!

Changes you can make

Like moving house or making changes to your property, there are other aspects of your policy that can alter the price.

A higher voluntary excess may lower your premium. Find a happy medium that you are willing to pay if you ever need to make a claim.

Optional extras are nice to have, but can add to the cost of your premium. Check at renewal if you still need any optional extras you had last time. If you had any specified items that you've since sold or given to a family member, be sure to remove them from your policy.

Take a look at other cover levels.

Ultimately, you should go with what suits you best and hits the sweet spot of having the cover you need and a price you're happy with. Here are Saga's comprehensive cover levels explained.

Changing circumstances in the wider world

There are other influences on the cost of your home insurance that are not a result of anything you’ve done personally. From nationwide and regional statistics to the state of the economy, these external factors all contribute to changes in your price:

Insurance Premium Tax (IPT)

Your home insurance is subject to Insurance Premium Tax, which has doubled to 12% since 2015 and can change with every government budget.

Local statistics

Newly published data can affect the cost of your home insurance. This might be public information about reported crime figures or industry research about the number of claims made in your neighbourhood.

Widespread inflation

Repairing damaged homes is becoming more expensive as houses and their contents are now much higher spec. Plus, labour costs to rebuild and refit homes have to be factored in.

Regional geography

If other properties in your area are prone to flooding or subsidence, yours might fall under the same catchment area or be regarded as a similar risk.

Operating costs

Insurance businesses have overheads so, naturally, each policy contributes to that. Any increases in the cost of energy consumption, staff wages or operating systems may also affect the cost of your insurance.

Providing financial support for your insurance

We really are here to help, so if you’re worried or concerned about covering the cost of your insurance, please give us a call on 0800 092 3341 and we'll be happy to talk things through with you.

We will help by reassessing your risk profile, the cover level and payment type you've selected or reviewing the option of a payment deferral.

If you're a Saga Home Insurance customer and your circumstances have changed recently please contact us.

Making sure your details are up to date has the added benefit of enabling us to give you an accurate price at renewal.

Who are Saga's home insurance policies underwritten by?

Saga Home Insurance policies, exclusively for people over 50, are unique products designed specifically for our customers. They are underwritten by a number of carefully selected insurers that provide our high standards of quality and service.