How to save on premiums as home insurance prices rise
An increase in both building and contents insurance costs since last year is further pressuring Brits facing a cost-of-living crisis.
The average premium paid for buildings and content policy increased by 3% from the previous quarter to £315 at the beginning of this year, according to the Association of British Insurers’ Home Insurance Premium Tracker.
The average buildings policy was up in the first quarter of this year by 1% from the last quarter of 2022 and the average premium rose by 5% from the beginning of 2022.
Customers paid just under 1% less at the beginning of this year than they did in the previous quarter, but prices have risen by 1% for contents-only cover over the last 12 months.
Extreme weather hits premiums
Last year’s stormy weather battered homes resulting in 170,000 claims for property damage with insurers shelling out £473 million to support customers.
Sweltering summer temperatures in 2022 have amounted to an expected cost of £219 million in claims – the highest since 2006.
Building costs are up by 15% since 2022 as a result of material shortages, fallout and delays from the pandemic, and changing political landscapes.
However, insurance costs are still below the rate of inflation despite the above inflation increase in building materials.
Laura Hughes, general insurance manager at ABI, said: “Insurers appreciate these continue to be tough times for many households coping with the rising cost of living. The rise in the average combined buildings and contents premium over the last year remains under the inflation rate, despite the above inflation rises in the cost of many building materials.”
She also advised: “During these challenging times, anyone worried about being able to continue paying their home insurance should speak to their insurer about any alternative payment options that may be available.”
Ways to save
Despite the rise in prices, there are a number of ways to save, according to consumer group Which?. Methods include shopping around, using comparison sites, not waiting until the last minute to renew, paying annually if you can afford to, and using a broker.
In March, YourMoney.com reported that more than half of households were finding it hard to cover their insurance bills.