We all know the importance of insuring our home and contents against unexpected damage, but unfortunately, doing so is costing us more each year, with the latest figures showing that home insurance premiums have soared by a further 8.5% in the last year to hit an average of £131.
That's according to figures from Consumer Intelligence, which blamed the rise on the combination of inflation increasing the cost of claims and higher levels of fraud. Indeed, the rise in average premiums is already nearly three times the 3% rate of inflation, which is in turn increasing the cost of repairs.
There are an increasing number of claims coming from water leaks as homeowners install more bathrooms and wet rooms, the report stated, while claims costs for jewellery are soaring as the rising price of gold and diamonds hikes up the cost of replacement and repair. Then there's the rise of fraudulent claims, particularly among younger age groups, which is having another knock-on effect on overall costs.
The report went on to reveal that older homeowners are faring a little better when it comes to price rises and average costs, with those aged 50+ paying an average of £127 for their home insurance, marking an increase of 8.4% over the year. Conversely, under-50s pay slightly more at £133, a rise of 8.6% year-on-year.
Other differences can be found when it comes to location, with average premiums in London being the highest at £168 per year, a significant 41% more expensive than the £119 homeowners pay in the South West of England. However, prices are rising fastest in the South East and Wales, where premiums are as much as 10.6% higher than last year, while Scotland has seen prices rise by just 5.6%.
There's slight good news in the fact that home insurance costs are still marginally lower than they were three years ago – although continued price rises mean they may not stay that way for long – and owners of new builds can take solace in the fact that average premiums are lower, at just £114, thanks to tighter building regulations.
Nonetheless, many could be starting to feel the pinch, and we may not have seen the end of price rises, either. "The home insurance market remains very competitive but customers can expect prices to continue to rise in line with inflation," said John Blevins, Consumer Intelligence pricing expert.
Compare prices! Average premiums may be rising, but that's not to say you can't get a better deal by looking away from your current provider. Start by using our home insurance quote tool to see if you can bring next year's bills down to size.
Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.