Big price increase for home insurance renewal

Trefo

Our current home insurance policy is with Nationwide at a charge of £390.72 over the twelve months. The renewal quote is £542.28. A whopping increase with no explanation as to why. There have been no claims on the policy in the last year, nor any other claims for that matter with other insurers for more than ten years. My wife and I are both retired. We know the cost of living is going up but is Nationwide using this as a basis for this increase? Is anybody else seeing disproportionate policy increases from other providers? We intend to shop around for alternatives.

Brie

I think sometimes a company will price things to make you leave as they don't want your business anymore.  

Sandtree

Pricing is predominately based on what their claims experience has been with people that have your characteristics... if there were a spate of burglaries in your neighbourhood then your premiums could go up despite that you've not been impacted or if the environment agency has changed their flood modelling and increased the risk level for your area etc.

Policies also change over time, there should be a note calling out any major changes to the product in with the renewal but if they decide to improve the quality that normally comes with a price hike.

There are secondary considerations like elasticity modelling (how price sensitive you are basically) but this tends to be fine tuning of the price rather than giant swings.

Ultimately their quote is what it is, their call centre wont be able to tell you specifically why its gone up as companies dont give commercially sensitive information to their front line people. If you dont like the price then shop around. 

dunstonh

The renewal quote is £542.28. A whopping increase with no explanation as to why. 

Could be a range of reasons.  If the policy is not that old, you may have still had some early year discounting that has been removed.   Or it could be that you are on an old version with an old underwriter that doesn't have many customers on it so the cross-subsidy pool is lower in terms of administration costs (i.e. costs shared over fewer policies means increased costs to each policyholder).      It could be that your postcode has had some higher claims.

Building costs have skyrocketed and are increasing daily.  Wood and bricks, in particular, are not having prices honoured for more than 2-3 days.    So, claims have become more expensive.

TELLIT01

I'm with Direct Line and our has reduced by about 1/3rd this year, and we did make a claim for damage to a glass roof a couple of years ago.  Shop around.