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Home insurance prices set to rise as subsidence claims mount

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After a period of falling prices, home insurance bills may rise as last year’s hot summer pushed up subsidence claims.

Analysis from insurance data analytics group Consumer Intelligence showed average premiums down 1% to £137 in the year to January as providers fought for business.

However, over the past six months prices have increased by an average of 1.7% and may continue to rise from here.

The culprit is last year’s prolonged dry and sunny weather, which drove an increase in subsidence claims. This is feeding through into price hikes.

The data showed that Londoners pay the highest annual bills at £181 with prices up 1% in a year while customers in the East Midlands and South West saw price rises of 0.8% and 0.5%. Customers in Wales and the South West are paying the lowest annual bills at £121 and £123. Wales has experienced the biggest price falls with premiums down 4.3% on a year ago.

New homes

Premiums for newer homes are the lowest, while insuring a home built before 1895 can add an extra 30% to your premium.  John Blevins, Consumer Intelligence pricing expert said: “Competition in the home insurance market is keeping premium increases to a minimum with only a few areas of the country seeing limited price rises.

“But the past six months has seen premiums starting to rise and that may be an indication of things to come with all parts of the country likely to be affected. Claims costs remain the main driver of premiums that we see, and the industry as a whole is experiencing a rise in subsidence claims which are costly for insurers and that will have an impact on total claim costs and prices.”

However, the longer-term trend is still for lower premiums. Customers are paying 1.4% less for home insurance than in February 2014.

The table below shows average premiums and price rises and falls around Great Britain.



London +1.0% £181
East Midlands +0.8% £132
South West +0.5% £123
West Midlands -0.4% £132
Eastern -0.8% £132
South East -0.9% £139
Scotland -1.4% £134
Yorkshire & The Humber -2.0% £133
North West -2.5% £135
North East -3.0% £131
Wales -4.3% £121
GREAT BRITAIN                      -1 % £137



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