Home insurance renewal checklist

The letter arrives in late February and goes on the pile. The renewal date is in March. By the time you remember it exists, you have ten days to make a decision. By the time you sit down to read it properly, you have three.

Most home insurance renewals get this treatment, and most get auto-renewed at whatever price is on the front page. This piece is about what’s worth reading properly when you do open the letter, and why the front-page price isn’t where the surprises tend to hide.

Start with the price

Since 2022, the FCA’s pricing rules have meant insurers can’t charge you more at renewal than they’d charge a brand-new customer for the same policy. The era of blatant loyalty penalties is over.

What hasn’t gone away is risk-based pricing. Insurers have got cleverer at segmenting customers, so the renewal price still tends to creep up - just for reasons they can defend. The rule still worth following is straightforward: get a quote from a comparison site before you accept the renewal. If the new-customer price is meaningfully cheaper than your renewal, ring the existing insurer and ask them why. Often the renewal mysteriously matches the comparison price.

Check the rebuild value

The buildings cover figure is the cost to rebuild your house from rubble, which for most homes is a lot less than what a buyer would pay. The gap between rebuild cost and market value is where people end up underinsured.

UK construction costs have risen sharply since 2021. If your sum insured was set five years ago and never updated, there’s a reasonable chance it’s no longer enough to rebuild your house. The ABI publishes a free rebuild cost calculator at abi.bcis.co.uk - it takes ten minutes and is the single most worthwhile check on the letter.

Underinsurance can also trigger the “average clause” - insurers reduce a claim in proportion to how underinsured you are. A sum insured at 80 percent of the right figure means a £10,000 claim becomes £8,000.

Then the contents

Contents sum insured is the second one to look at, because contents creep upwards quietly. Phones, laptops, watches, kitchen equipment, sofa, bikes. Most households have more than they think.

The bigger gotcha hiding inside contents cover is the single-item limit. Most policies cap individual items at £1,500 or £2,000 unless you list them separately. A modern iPhone is comfortably over that. A MacBook Pro is over that. A piece of jewellery from a partner can easily be over that. If your phone is stolen and your single-item limit is £1,500, the policy pays £1,500, regardless of what the phone cost.

The fix is to specify high-value items individually. Some policies do this for free up to a certain value, others charge a premium.

Then the excesses

The excess on the front page is the standard one. There are usually others hidden in the small print:

• Subsidence excess, often £1,000 or more, sometimes £2,500
• Escape of water excess, often higher than the standard one
• Accidental damage excess, separate again

When something genuinely bad happens, this is where the surprise comes from. A burst pipe in January with a £750 escape-of-water excess on top of your £350 standard excess means £1,100 out of pocket before the policy contributes a penny.

Then the exclusions and add-ons

The exclusions list is worth a slow read once a year. The ones most likely to bite:

• Accidental damage is often not included by default. The wine glass into the TV, the toddler with a marker pen on the sofa, the stepladder through the conservatory roof. An add-on covers these.
• Working from home. Some policies require you to declare it, especially if you have client meetings at home. Failing to declare can void the policy.
• Alternative accommodation. If your house becomes uninhabitable, where will you live and for how long? Check the limit. £25,000 sounds like a lot until you’re paying London rent for six months.
• Personal possessions away from home. A separate add-on. Worth it if you regularly carry expensive things, not worth it if you don’t.

What makes this hard, and what makes it easier

The first time you read a renewal letter properly takes an hour. You have to dig out last year’s policy to compare, work out the rebuild value, and squint at the small print of the exclusions. It’s a real piece of work.

The second year, if you still have last year’s review notes, it’s a much smaller piece of work. The questions are mostly “what changed?”, and most of the answers are “not much.”

What makes the difference between an hour and a quick check is continuity. Last year’s policy details still where you can find them. Last year’s notes alongside the new letter. Most of the work in any single February is the recovery of what you already worked out the year before.

This is the kind of thing Oosby exists to hold for you. The policy you added last March is still where you put it, with the figures, the small print, and any notes you made the last time round. The thread between years stays intact, and the renewal letter stops being a fresh problem every spring.