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Bad weather sends home insurance costs soaring

Bad weather sends home insurance costs soaring

Category: Home insurance

Updated: 27/11/2012
First Published: 20/01/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The price of home insurance continued its steady upward trend in 2011 as a rise in the number of weather-related claims put pressure on premiums.

According to the AA's latest Shoparound index, which is an average of the cheapest three premium quotes returned from a range of insurers for each 'customer' in a nationwide basket of risks, the average quote for annual buildings, contents and for combined policies increased by up to 11% during 2011.

Premiums relating to buildings cover are now 9.5% higher than at the end of 2010, standing at an average annual premium of £156.95.

Contents premiums have increased 11.2% to £80.58 over the past 12 months.

Meanwhile, combined buildings and contents premiums are now up 5.6% compared with January 2011.

According to Simon Douglas, director of AA Insurance, bad weather and burglaries have played their part in sending premiums soaring.

"Storm damage, flooding and burst pipes are top of insurers' list of worries, following two harsh winters and increasingly frequent severe weather," he explained.

"In addition, economic pressures result in more theft claims.

"According to the British Crime Survey, domestic burglary in England and Wales grew by 10% over the 12 months to the end of June 2011.

"The premium increases we have seen over 2011 reflect both past losses and concern about future claims."

Mr Douglas said he expects premiums to continue to rise through 2012, albeit not as sharply.

"I expect that by this time next year, home premiums will have risen by somewhere between 5% and 10%," he added, pointing out that historically, home premiums have been static.

"For example, between 1994 when the AA started tracking home premiums and January 2009, the average quoted premium for a contents policy rose by less than 1%, while buildings had risen by less than 8%; that compares with more than a 100% increase for a car policy over the same period.

"Home insurance still represents good value."

If you need to review your home insurance policy, or perhaps you're looking to purchase it for the first time, some excellent deals are available at present.

Up to 30% can be saved on Nationwide Home Insurance when buildings and contents cover is bought together – Nationwide customers get an extra 15% off too.

After you have completed one short form, they compare the premiums offered by their panel of insurers to find the best quote for you which can then be purchased online in minutes.

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