Why does my listed home insurance go up in price if I don't claim?

By Abode Insurance

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It’s safe to say that almost all of us have been affected by the cost-of-living crisis in some way and the insurance industry doesn’t fall short of this. Insurance premiums are ever increasing with what might seem like no justification, so at Abode we want to be as transparent as possible and help you understand why your listed property might be getting more expensive to insure.

During recent years, the UK home insurance industry has been adversely affected by many factors including:

Rising cost of building materials

The combination of Brexit and Covid-19 drastically affected the cost of building materials meaning that it is has become more expensive to rebuild your home if it’s damaged or destroyed. This is particularly relevant to listed properties due to the strict restrictions regarding reinstatement. Insurers are increasing the provision they make in their underwriting for rebuild costs by a higher percentage than before to allow for this, which in turn results in higher premiums.

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Access to skilled labour

Brexit also heavily impacted the UK’s access to skilled labour. This shortage is making the available specialist labour more expensive, which in turn increases the cost of claims and therefore premiums increase because of this.

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A series of natural catastrophes

In 2020 alone, storms Ciara and Dennis happened which were both classified as 1 in 100-year events. As the frequency and risk of natural disasters is increasing, the risk and cost of home insurance claims is increasing too. Even if you have not made a claim yourself, you may still be seeing higher rates due to claims made by other people. That’s because your insurance premium is also impacted by the severity and frequency of claims made by your neighbours. With the number of claims increasing, insurers put everyone’s premiums up to cover the cost of being able to pay out claims.

Insurer solvency rules

This means that insurers now need to hold more spare capital (the money it has available to pay for its day-to-day operations and to fund its future growth). This is good because it reduces the chance of bankruptcy, but it also reduces insurers capacity to write business and has acted as a barrier for entry for new insurers to come into the market.

These events have caused the market to ‘harden’ further, which means that premiums go up and insurers are less flexible about what they are prepared to underwrite and at what cost. This reduces competition in the marketplace and can lead to restricted cover, higher premiums, and more restrictive terms.

Tips to help lower your premium

We’re a specialist insurance broker, so you can leave the comparison work to us. We’ll approach all our listed property specialists to get you the best deal. However, there are a few things you can do from your end to keep costs down:

Pay annually

Many insurers charge interest for paying by direct debit, so you can avoid this by paying in one lump sum. With rising interest rates, this is a good way to save money.

Combine your policies

A policy that covers both buildings and contents insurance is often cheaper than taking out separate policies.

Increase your excess

This is the amount you choose to pay for any damage before your insurer covers the rest. Increasing your excess in most cases brings the cost of the insurance down. Speak to an Abode insurance advisor to find out what options we have.

Install a burglar alarm

Many insurers see a burglar alarm as a positive risk factor as they reduce the risk of burglary. Speak to an Abode insurance advisor to find out if installing one can reduce the cost of your insurance.

Only claim if you have to

In the current market, even the smallest of claims are having a significant impact on premiums and are often taken into account for up to 5 years after the claim is made. If it is something you can cover the cost for yourself, it is likely to work out cheaper in the long run for you to do that.

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Now, more than ever, you need a trusted adviser to help you get the best insurance cover for your listed property and at the best price. Abode are here to fight your corner and to negotiate with underwriters. There are still good deals to be had, discounts to be found and ways of reducing your premium, but you need to know where.

In any instance, speak to an Abode advisor if you have any questions or if you are concerned about paying your insurance premium. Our friendly and understanding team at Abode will try and do whatever we can to help and make sure your listed property insurance is not only meeting your needs, but affordable too.

Live with character. Insure with confidence.

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Abode is a trading name of Howden UK Brokers Limited, which is authorised and regulated by the Financial Conduct Authority No. 307663. Registered in England and Wales under company registration number 02831010. Registered Office: One Creechurch Place, London, EC3A 5AF. Calls may be monitored and recorded for quality assurance purposes.