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Wet summer blamed for home insurance price rise

A flooded streetThe average insurance quote for both home buildings and contents cover has risen following a washout summer of storms and floods, according to the AA.

The cost of an annual home contents insurance policy has risen to £92.84 – an increase of 3.3 per cent over the past 12 months.

Meanwhile, buildings insurance premiums rose to £181.48 in the third quarter of 2012 – an increase of 5.2 per cent since last year.

This is according to research by home insurance provider the AA.

Home insurance prices

Average Premium

October 2012

October 2011

Percentage change

Contents

£92.84

£89.86

3.3%

Buildings

£181.48

£172.51

5.2%

Combined Policy

£242.42

£226.20

7.2%

 

Washout summer blamed

Industry experts blamed the washout summer for the rise in the cost of home cover, as insurers seek to recoup the money paid out in claims.

Simon Douglas, director of AA Insurance, said the wet summer is a sharp reminder that the industry must be prepared for more of the same over coming years.

Confused.com’s analysis of 2011 home insurance claims data found that storm damage was the second most common reason for buildings insurance claims, behind accidental damage.

And insurers expect changing weather patterns to give rise to more of this type of claim in future.

The Environment Agency predicts that heavy rainfall will become three or four times more common over the coming decades, increasing flooding tenfold.

Cover for flood-prone properties

This current agreement between the insurance industry and the government which ensures that families in flood-prone properties can continue to obtain flood cover expires next June.

Douglas said: "If no agreement is reached soon this could lead to the most vulnerable homes becoming uninsurable.

"To put this into context, insurers measure flood risk in terms of events likely to happen over a period of years. 

"Even if a home is at risk of flooding once in a century, given that the average cost of repairing a flood-damaged property is £20,000, that is the equivalent of £200 per year, on top of the cost of covering other risks."

"It's vital that the government and local authorities make tackling the problem at source by investing in flood defences a priority.”

Regional differences

Householders in central and north-west England face the highest cost to protect their possessions with the cost of home contents insurance standing at £101 on average.

This is marginally higher than Yorkshire which saw premiums rise by 0.9 per cent to £100.

But in Wales, the average quote for contents insurance fell by 0.6 per cent to £84. 

The cheapest regions to insure your home contents are Scotland and the west country, with an average annual cost of £79.

But every area of the UK saw a rise in the cost of building cover, which protects against any damage to the structure of your property.

The most expensive region for buildings cover is London and the south-east, with an average premium of £200, an increase of 2.9 per cent between July and September.

The biggest regional premium increases were Yorkshire and East Anglia, which saw premiums jump 3.5 per cent to £177.

Wales and the west country remain the cheapest regions for building cover, with an average quoted premium of £157.

How to save

Read our guide on how to cut your home insurance costs to for tips on finding cheaper cover.




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Naphtalia Loderick

Naphtalia Loderick

Naphtalia Loderick reports on all things personal finance at Confused.com. She started out on a weekly newspaper, via a national news agency and a stint in the fun but ‘not as glamorous as it appears on screen’ world of TV at the BBC researching consumer films for The One Show.

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