Your home insurance price explained

How we calculate the premium you pay

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How insurance works

To work out the price of your insurance, we weigh up several factors. Some factors are specific to you, such as the chances of you making a claim. Other factors are to do with the world around you and what’s happening in the insurance market.

Every customer pays into a central pot, and if you make a claim, we pay it out of that pot. If lots of people claim at once, the pot has to go further, which means prices go up. But whatever happens, we constantly review the way we calculate the cost of home insurance so we can make sure you get the most accurate price.

On this page, we’ve explained some of these factors and how they may affect your price.

Your home insurance renewal

Before your current policy comes to an end, we’ll send you a renewal invitation. It will show two prices – last year’s price and a price for continuing cover for another year.

As you’re already a customer with us, your price to renew your cover will be the same as or lower than the equivalent price for a new customer. Your price might be different this year because of recent changes in regulation which affects all home insurance providers.

Further information is available in frequently asked questions

Some examples of how you affect your price

Where you live

Public data on your property’s local area is used to rate your address and set your personal price. Factors include the average claims cost and future claims we expect in your neighbourhood. If claims in your area go up it may cost more to insure your home.

Any past claims

To work out your price, we factor in your claims’ history, which includes any accidents, claims, or losses in the last 5 years. The fewer the past claims you have, the lower your premium may be.

Your home's build

How your property is built is likely to affect your price. Based on greater risk of fire-damage, wooden features, such as timber frames, may raise your premium. Any non-standard building materials that may cost more to source or repair could have the same effect.

Your type of home

There are many reasons why we assess types of homes differently. For example, terraced houses suffer less subsidence, so may cost less to insure than a semi-detached property in an area where there’s a high risk of subsidence – regardless of your home's size or value.

The number of bathrooms in your home

A common cause of claims is escape of water. More bathrooms may increase the price you pay as this means more pipework, which means a greater chance of something going wrong. It’s also more difficult and costly to trace the origin of the leak.

Who’s at home during the day

If someone is home during the day, you could be at a lower risk of theft, but this may increase the risk of claims such as accidental loss or damage, fire or plumbing problems which may increase your price. Also, the number of people living at home may have a big impact on prices. More people can mean more belongings and more potential claims.

Some examples of how events affect your price

Severe weather

Long cold or wet spells can burst pipes and damage homes. Plus, we regularly review the chances of flooding driving up future claims. The Government works with insurers, including Aviva, to make sure residents in flood areas can get their homes insured. This has driven the Flood Re initiative.

Rising repair costs

From TVs to tablets, state-of-the-art kitchens to lighting, the items in your home get ever dearer. Naturally, it’s also getting dearer to fix them, which increases the cost of providing insurance and the price you pay.

Changing claims market

If the variety and number of claims we receive changes, so do our prices. We estimate how much we’re likely to pay in future claims, and factor this cost into your premium.

Insurance Premium Tax increases

Each price includes Insurance Premium Tax (IPT). The Government announced a rise in IPT in 2016 and in June 2017 to 12%. Any change to IPT will directly impact the price you pay.

Other costs

You can access our products in different ways. Your premium includes costs for current services, such as contact centres and online support, and for investing in future products and services.