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Home insurance bills up 36% in a year, with further price rises expected

Home insurance bills up 36% in a year, with further price rises expected
Rebecca Goodman
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Rebecca Goodman

The average price of home insurance quotes rose 36.1% to £227 in the 12 months to October.

This is the highest figure recorded since 2014 and a rise from £163 a year ago, according to Consumer Intelligence.

However, it noted there has been a slowdown in price rises, with premiums up 8.5% in the last three months, compared to 9.9% in the previous quarter.

But prices are expected to rise further still, due to an increase in claims after the recent storms Babet and Ciaran.

Since February 2014, home insurance premiums have risen by 42.2% and 33.8% of this rise has happened this year. Car insurance prices have also risen and are up by record levels in 2023.

The figures used by Consumer Intelligence are based on the average amount of the five cheapest quotes for a combined buildings and contents insurance policy. Yet it said the most common quotes given in October were priced between £150 and £199.

In October 2022, 83% of people were given a quote of £150 or under but in October 2023 this percentage had fallen to 41%.

Higher price hikes for customers with claims…and Londoners

Over the last year, insurance customers who have made a claim for water-related damage have seen average price rises of 42.8%. Meanwhile, those who have made buildings claims have seen a rise of 40.7% and those who have made a damage-related claim have seen their prices rise by 39.5%.

By comparison, people who have made no claims have seen their average insurance bills rise by 35.7%.

Geographically, those in London pay 36% more for home insurance than the rest of the UK on average while those in the North East pay 20% less.

The biggest average home insurance price rise (38.5%) was recorded in the South East.

The second-highest rise of 38.1% was to properties in Yorkshire and the Humber while Londoners saw their prices rise by 35.55% in the last year on average.

The smallest annual increase of 32.1% was seen in the North East.

Those aged under 50 pay more for their home insurance on average, however over the last three months they have seen a rise of 8% compared to 9.3% for those aged 50 and over.

Homes built in the Victorian era, between 1850 and 1895, are the most expensive to insure on average. Premiums for these properties are 21% higher than the second-most expensive homes to insure, those built between 1910 and 1925.

The cheapest homes to insure are those built this century, recording the lowest price rise of 33.9% over the last year for homes built since 2000. The biggest price increase of 39.3% was for houses built between 1925 and 1940.

‘We anticipate further increases’

Laura Vas, senior insight analyst at Consumer Intelligence, said: “With Storms Babet and Ciaran causing significant damage to thousands of homes across Britain, we anticipate further increases in premiums over the coming months.

“Homeowners with prior claims may see additional increases in coming months following recent storm damage, although insurers could spread the claim costs across all policyholders driving further market inflation.”