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Home insurance costs stay still

Home insurance costs stay still

Category: Home insurance

Updated: 20/01/2015
First Published: 20/01/2015

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 It is now over 6 months old so the content may be out of date.

Ensuring that your home and all of your possessions are protected should the worst happen is a priority for all homeowners, so reports that the cost of buildings and contents insurance has remained static over the last three months is welcome news.

Staying level

According to the latest British Insurance Premium Index from AA, just 5p has been added to the average annual cost of a combined buildings and contents insurance policy, an increase that is unlikely to make a big dent in the pockets of homeowners. Indeed, the figures show that the average premium for a combined policy currently stands at £163.06, which is 5.3% less than a year ago.

Similarly, the cost of separate buildings and contents insurance has stayed on an even keel over the last three months. The average for buildings insurance rose by a tiny 19p (0.2%) to £114.92 over this period, while contents insurance fell by £1.61 (2.5%) to stand at £62.01. Both of these premiums are far lower than they were 12 months ago – buildings insurance is now 8.1% lower, while contents insurance is 7.7% down on premiums a year ago.

This flattening of insurance premiums is thought to be a result of flood and storm damage staying within insurers' capabilities, which means that there has been no need for a drastic rise in premium costs. Instead, home insurance policies are still at bargain prices, being similar to the premiums seen in 1994 when AA began its index.

Don't rest easy

However, although premium levels are currently at a comfortable level, such low prices are unlikely to remain in place forever.

"Last week scientists announced that sea levels are rising faster than expected, which is unwelcome news for some coastal communities. And January has already seen some damaging weather, including storms and localised flooding, even reports of tornadoes," warned Janet Connor, managing director of AA Insurance.

"This should be a timely reminder that British homes are increasingly vulnerable: and not just those identified as being at highest flood risk. Flash flooding can happen anywhere and it doesn't just ruin homes; the clear up has a major impact on peoples' lives, their health, the local infrastructure and the economy."

Bearing this in mind, now may be an opportune time to dig out your policy and check what you are covered for. Winter isn't over yet, and you could still end up facing significant damage to your home. Check that your cover hasn't expired and find out exactly what you are covered for. If you are undercovered or your insurance is about to expire, start looking around for a new policy. You can take a look at our comparison tool to set you on the right path.

Paying out for insurance may seem like a chore, especially if you are lucky and never have to make a claim, but with insurance premiums currently at bargain levels, buying good all-round cover isn't as painful as you may think. Ms Connor adds: "After all, peace of mind about the protection of your possessions for a whole year, for less than the amount you'd pay to fill your car's fuel tank, has to be a bargain!"

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