06/10/2025

Why Are Home Insurance Premiums Going Up?

Home insurance

Over recent years, many homeowners have seen steep increases in their home insurance bills. Questions like “has home insurance gone up?”, “why has home insurance gone up so much?” and “how much has home insurance gone up this year?” are common.

In this post, we dive into the main causes behind home insurance increases in the UK, back it with data, and explain what you can do about it.

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What data shows: how much have premiums risen?

UK combined home insurance premiums are reported to have risen by 8.5 %, with the average policy cost now around £231 in some data sources.

Compare the Market data shows a 14 % year-on-year increase between October and December in a recent year.

The Association of British Insurers (ABI) says insurers paid £1.6 billion in home-related claims in Q2 2025, a 7 % rise from Q1.

Meanwhile, some reports (e.g. Which?) show that average combined policy prices in Q2 2025 fell slightly (from £393 to £391) — suggesting variation by region and insurer.

These numbers confirm that insurance premium increase is very real — though the exact rise varies depending on postcode, property, and insurer.

Why have insurance premiums gone up so much?

There isn’t a single cause behind the home insurance price increase seen in 2025.
Instead, several pressures are pushing premiums higher across the UK — from rising construction and labour costs to extreme weather events, higher claims volumes, and new regulatory demands.

Insurers are also dealing with increased reinsurance costs, more frequent fraudulent claims, and the ongoing effects of inflation on materials and repairs.
Together, these factors have created the sharpest home insurance rise the market has seen in years.

Below are a few common reasons behind the increase you see in home insurance premiums.

1. Rising rebuild and repair costs

Material and labour prices have risen sharply since 2022. The Office for National Statistics reports that the cost of key building materials such as timber, cement and steel remains significantly higher than pre-pandemic levels.

According to AXA UK, rebuilding costs have climbed by around 21 % over two years, as skilled trades and materials become more expensive.
That means insurers pay more to settle each claim — pushing up the average home insurance rates for everyone.

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2. More frequent extreme weather and climate risk

Storms, flooding and subsidence events are increasing in both frequency and severity.
The Met Office recorded seven named storms between October 2023 and February 2024 — one of the most active seasons on record.

According to the Association of British Insurers (ABI), insurers paid more than £500 million in flood-related claims during early 2024 alone.
As extreme weather events rise, insurers re-price premiums in high-risk postcodes, leading to widespread home insurance increases.

3. High claims volume & large payouts

The ABI reported that UK insurers paid out £1.6 billion in property claims in Q2 2025, a 7 % rise from Q1.
Each major storm, freeze or flood season brings a wave of high-value claims that can exceed insurers’ expectations.

When the volume and value of claims rise faster than premiums, insurers have to raise renewal prices to keep up — one of the clearest reasons home insurances has gone up this year.

4. Underwriting and insurers’ margin pressure

Many insurers now operate at a combined operating ratio above 100 %, meaning they’re paying out more in claims and expenses than they earn in premiums.

Howden Insurance notes that years of heavy losses, higher reinsurance costs and limited investment returns are squeezing profit margins.
To stay sustainable, insurers are raising prices and tightening underwriting, a key driver of the home insurance rise in 2025.

5. Changes in regulation or risk models

The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) require insurers to hold enough capital to withstand future risks, including climate-related events.

As highlighted by the Economics Observatory, this push to model climate risk more accurately has led insurers to increase reserves and re-evaluate exposure.
That regulatory shift adds further cost pressure and contributes to the house insurance increase 2025 trend.

6. Insurance Premium Tax (IPT) & added policy costs

The UK’s Insurance Premium Tax is currently 12 % for most home policies — effectively adding a built-in surcharge to every premium.

Even though insurers don’t control IPT, it compounds total costs alongside higher administrative and compliance expenses.
Over time, these layers make home insurance more expensive and help explain why house insurance has increased so much.

7. Fraud, theft & claims inflation

Fraudulent or exaggerated claims are also driving up costs. Ageas UK reports more small, opportunistic frauds — such as exaggerated accidental-damage claims — that raise investigation and processing costs.

At the same time, claims inflation means every valid claim now costs more to settle replacement goods, trades, and materials have all risen in price.
These constant increases feed into the overall insurance premium increase homeowners are facing across the UK.

Why are some people seeing very large increase in home insurance premiums?

According to, Wikipedia some homeowners report their policy doubling at renewal. Here’s why:

Their region may have seen a severe weather or subsidence risk spike.

They may have switched insurers or changed risk ratings (e.g. added extensions).

They may have had an older building or higher rebuild cost, which escalates premiums.

If they live in a flood-prone area not fully covered by schemes like Flood Re, insurers may charge much more.

That’s why “why has my home insurance doubled?” is a question many ask.

Will premiums keep going up in 2025?

Likely yes, though the rate of rise may slow:

Some insurers already report premium growth is softening.

But cost pressures (material, labor, climate risk) persist.

Competitive insurer capacity may moderate price increases.

So, while “home insurance rise” will probably continue, it may not always be as steep.

What you can do to manage increases

Check your rebuild cost — don’t overinsure.

Review your contents cover — maybe lower or remove optional add-ons.

Improve security — alarms, CCTV, strong doors can earn discounts.

Raise your excess (but only if you can afford it).

Shop around at renewal — don’t assume your current insurer is best.

Bundle policies (home + other covers) where possible.

Keep up maintenance — damp, damaged roofs or weak foundations are red flags.

Why this matters to Norton and consumers

At Norton, we want you to understand your cover, not get surprised by big premium jumps. We help you pick cover that makes sense for your risk and your wallet.

Given how volatile the market is, we’re watching trends closely to help clients stay ahead. If you want to stay in tune with ongoing trends in home insurance, subscribe to our newsletter below.