Monthly Home Insurance vs Annual Home Insurance

To pay annually or monthly? That is the question. But is there an answer? Like most insurance policies, home is no different in that you'll have the option of paying annually or monthly.

Ultimately, however you decide to pay is your choice. But we'll cut through the noise and explain both options, helping you pick the best payment plan for your home insurance!

Should I pay monthly or annually for my home insurance?

It's the million-dollar (pound) question. That might be a slight exaggeration, but choosing one or the other can change how much you pay for home insurance.

Let's dive into both options:

Monthly home insurance

In a world of monthly gym and music streaming memberships, you can also pay for your home insurance policy in installments.

There are various benefits in paying monthly, such as:

• You can break down the cost of a policy into manageable monthly payments
• It can be easier to budget for along with other household bills

So far, so good. But there is one key drawback to forking out for monthly home insurance.

Insurance providers are effectively lending you the cost of a policy over a year. So, you'll have to pay interest on top of your monthly payment for each installment.

It's not uncommon for insurers to conduct a credit score check before offering you a policy. Some charge greater interest if you have a low credit score.

You'll also need to keep up with your payments. Not doing so could harm your credit score, but more importantly, your policy could be cancelled!

Annual home insurance

Paying a lump one-off payment for your home insurance might not be the obvious option at first glance.

But, if you dig a little deeper, it can actually work to your advantage:

• Overall you'll pay less for home insurance compared to monthly instalments because you won't have to pay interest
• A more obvious bonus is that once you've paid it, it's out of the way. You don't have to think about home insurance again for 12 months!

Paying annually can help you save money when it comes to paying for home insurance. But you should only consider this option if you can afford to do so.

You could set yourself a reminder a few months before your renewal to budget for an annual payment. This will also give you time to shop around for the best deal, saving you more money!

Is paying monthly for my home insurance more expensive?

Yes. While it's a more manageable option, you'll typically pay interest each month on top of your premium for the privilege.

To illustrate the difference, here's what customers who bought home insurance through Confused.com pay, on average*:

If you're looking for both contents and buildings insurance, it does actually work out cheaper to look for a combined policy!

So, without sitting on the fence, what option you go for should be based on your preference and personal circumstances.

Tips to save money on your home insurance

What you pay for your home insurance is calculated based on your property, potential risks like crime rates, and your personal circumstances, among other factors. So, there isn't a set amount you tend to pay for your policy.

Paying annually instead of monthly for home insurance does work out cheaper. But there are even more tips that can help you save money!

• Increase your voluntary excess: The more you're willing to contribute towards a potential claim, the cheaper your policy could be. Just make sure you can pay this if you need to make a claim.
• No-claims bonus: You can build this for every year you don't claim. Home insurance providers may offer you a discount as a result.
• Accurately estimate your contents: If you overestimate your contents, you could be paying more than necessary for your policy. On the other hand, if you underestimate this, you might not have enough cover if you need to claim!
• Shop around, compare quotes, and don’t auto renew! Comparing quotes prior to renewal and switching could be cheaper than sticking with your existing insurer.

*Confused.com data: January-June 2025