The cost of insuring your home has surged 32 percent on last year on the back of rising claims made to cover the cost of storms and flooding.
The average price of combined home insurance is now £241, which is up by 32 percent – £59 – on last year and 55 percent over two years, according to Go.Compare’s latest Home Insurance Index.
The new data also revealed variations in home insurance prices across the UK, with home insurance in the most expensive region costing more than double that of other areas.
Northern Ireland has the highest prices on average for combined home insurance at a cost of £416, followed by Greater London at £351.
By contrast, the cheapest place to insure a property is the North East of England at £206, which is less than half the figure in Northern Ireland.
Go.Compare said the rising number of claims linked to storm damage is largely to blame, as well as increases in the cost of materials and the pay of workmen.
There were just four storms recorded in Britain between July 2022 and June 2023. By contrast there have already been 11 storms recorded in the current annual season, according to Mohammad Khan, general insurance leader at PwC.
Mr Khan said: “Every time there is a storm and payouts, some insurers put up their prices.
“That is compounded by the fact that over the past two years the cost of repairing a house has gone up a lot. If I bought some paint between 1 January 2022 and 1 January 2023, that cost went up by between 25 and 35 percent.”
Nathan Blackler, Go.Compare’s home insurance spokesperson, said on the Index: “The continued rise of home insurance will be unwelcome news for homeowners, particularly as we head towards the winter months, where household bills typically increase.
“There are a number of reasons that can explain the consistent price rises with home insurance. Inflation is still high, and this combined with the rising costs of materials and labour has a knock-on effect on the cost of insurance.
“Additionally, we have seen a 55 percent rise in the number of claims submitted for storm damage in the past year – and as insurers factor in the increased risk from adverse weather conditions, this affects prices as well.”
He added: “It is worth remembering that besides these factors, there are a wide range of things that will affect your home insurance premium – some we can change, and some we can’t.
“ The size of your property and where you live help determine the price you pay, but so do things like home security measures you have in place.”
Consumer campaigners at Which? have issued warnings that insurance companies are imposing punishing fees and charges – adding up to hundreds of pounds – where householders spread insurance payments over a year rather than paying upfront.
Rocio Concha, Which? Director of Policy and Advocacy, said: “More frequent storms and flooding mean good quality home insurance has become essential for many people – yet customers with these products face some of the lowest claims acceptance rates.
“Making matters worse is the high cost of paying monthly for cover for customers who can’t afford to pay in one annual lump sum.
“Which? research has found that with some firms, paying monthly is comparable in cost to expensive credit card borrowing – even though the credit risks for insurers are comparatively moderate.
“The regulator needs to take swift action by making clear that insurers squeezing customers paying monthly with excessive interest rates to make higher profit margins does not meet fair value requirements, and setting deadlines for firms to fix this.”
Go.Compare said there are a number of ways people can help lower the cost of home insurance. These include:
* Improving your home security – adding insurer-approved locks and alarms can help lower your premium, as your home is considered safer.
* Keeping up with home maintenance – making sure your home and garden are in top condition will lessen the risk of you needing to make a claim and help protect any no-claims discount you have.
* Avoid unnecessary add-ons – look closely at your policy details and only pay for the cover you need.
* Don’t rely on inaccurate estimates – take care when calculating your rebuild cost and the value of your contents, as this will impact the cost of your policy.
