Reasons why your premium could change

The cost of claims

So, your home insurance premium has increased, but you don’t understand why? Here, we explain some of the key reasons.

It’s not just your own claims history that affects your home insurance premium. While some things are out of our control like Government rulings for instance, we also take measures to protect our customer by ensuring claims aren’t fraudulent. We pay millions of pounds every year to settle our customers’ claims – and that cost makes up the biggest chunk of what each person pays us to insure their home. Insurance companies absorb repair and replacement costs associated with a claim, and this can have an impact on your premium – for instance as home technology gets more expensive to replace.

Severe weather

You’re not alone in complaining about the weather. It’s not just rainy days that get us down – storms and cold snaps can put premiums up. Weather patterns are changing, and we’re seeing more flooding and storm damage. To make sure we’re able to put right future weather-related claims, premiums could increase. But it will pay you dividends if you make sure you’re well prepared for weather events in your area.

Insurance fraud

According to a 2016 report by the Chartered Institute of Insurers, insurance fraud costs policyholders up to £50 per year. Unfortunately, it’s the innocent who end up paying the price. So, we’re working hard to stamp out fraud and stop this crime from hurting us all.


Taxes to regulatory bodies and the government make up part of your price. Take Insurance Premium Tax (IPT) for example. Between November 2015 and June2017 it went up four times – from 6% to 9.5%, 10% and then to 12%. That’s quite an increase that every insurer needs to include on every policy. If IPT continues to go up in future, this may impact your future premium when it’s time to renew.

New technology

Today’s homes are becoming more and more advanced every year. Items in and around the home are increasingly complex, and repairing or replacing them after a claim can be a lot more expensive. We’re constantly looking at the latest tech trends when we’re pricing policies.

Why a change to your details could change your premium

Checking your home insurance is right for you, and all your details are up-to-date and correct, means you’ve got the right cover. It also means we’ve got the right information to sort things out if you make a claim. Telling us about any changes, big or small, means you pay a premium that accurately reflects the risk – that’s why you’ll see an increase or decrease in the price. If you don’t tell us about any changes, your policy may not be valid.

Here are some examples why your premium might change.

Your new home

Moving home? Then you’ll need to update your home insurance. If you were upsizing, you’d probably expect to pay more for your insurance. And you’d be right – as larger homes with more rooms tend to have more possessions, and higher costs for repairs. Generally, the bigger the home, the more it will cost to insure. Older homes often have higher insurance costs too, as things are more likely to go wrong. And statistics show that detached homes are more at risk of burglary.

Your new address

Insurance premiums aren’t just based on the property and the people living there, postcodes are important too. Even buying a similar property a few streets away, could affect the price.

Some key factors that could affect your premium when you buy a property:

  • Closeness to water sources, and how many homes have been affected by flooding
  • Number of claims made in the area
  • Crime and vandalism rates

High numbers of claims in your postcode, like flooding, may affect your premium. If you buy a property in an area where there are fewer claims made, your home insurance could cost less.

Your family and the people who live with you

More people indoors means more chance of damage being caused. So, it’s likely you’ll pay more for your home insurance if people move in with you. And if a new baby arrives, it could also change the price of your home insurance. That’s because statistics show young families make more claims. Nevertheless, when your policy is due for renewal, it’s important you tell us about everyone who lives at home, and let us know when children grow up and fly the nest to make sure you always have the cover that’s right for you.

Your home improvements

If you’re making your property larger by adding an extension, this could change the rebuild cost, and it’s important to let us know. You can update the rebuild cost for your property in your AXA Account. If you need help calculating the rebuild cost, use the Association of British Insurers’ rebuilding cost calculator as a guide, or contact a qualified surveyor or valuer. Once updated, we’ll then calculate any changes to your premium to make sure you have extra cover for the extra space.


Making a claim won’t affect the price of your insurance straightaway, but you may see an increase when it’s time to renew. As you would expect, people with fewer or no claims tend to pay less for their home insurance.