The latest benchmark British Insurance Premium Index shows that the average quote for a combined home buildings and contents insurance policy fell by 3.6% or £6 to £158.66. Over 12 months, the typical Shoparound quote for combined policy fell by 9.6%, or nearly £17.
The analysis also shows that the cost of a buildings policy dropped by 3% over the quarter to £112.74 (10.1% over 12 months) and the cost of a contents policy fell 2.3% to £60.28 (8.2% over 12 months).
The Shoparound average is based on the five cheapest quotes for each ‘customer’ in a nationwide basket of risks and based on prices from direct insurers, brokers and price comparison sites.
Janet Connor, managing director of AA Insurance said that the falls are greater than expected but it reflected a long period of benign weather: “Home premiums are most likely to be affected by extremes of weather and the recent winter has on the whole, been notable for its lack of heavy rain, snow, winds and extreme temperatures. Nevertheless, climate change is a reality leading to some parts of the world suffering catastrophic weather events over recent months. This should serve as a reminder that the weather can produce unexpected extremes and the UK is not immune.
Home insurance generally serves home owners well when there is flood or storm damage but the fact is, claims over the past three years have been well within insurers’ capacity and as a result, premiums have fallen.”
Ms Connor says that the cost of Home insurance is little different to when the AA launched its Index 21 years ago: “I would not have expected premiums to have fallen by so much but insurers are competing for market share by offering introductory discounts so this is great news for consumers. But the averages do hide regional differences and those homes most at risk of flooding will be paying higher than average premiums.
The Flood Re insurance scheme, designed to enable those in at-risk homes to obtain affordable insurance cover, will help thousands of families. It will be funded by a levyon insurers which equates toaround £10on everyhome insurancepolicy. It has however been dogged bytortuous negotiation between the insurance industry and the governmentand I now don’t expect it to be launched until next year.
And although we may be experiencing relatively gentle weather conditions now, I hope that whatever form the new Government takes after the general election, it will not let flood defence spending or the launch of Flood Re slip down the agenda.”
The cost of insuring your home for a year can be less than the cost of filling a car’s fuel tank. That has to be a bargain.”
