6% annual average home insurance price increase
According to the Association of British Insurers (ABI), the average price of a home insurance policy was £315 in the first quarter of 2023, up 6% on the same quarter last year.
The average price of insurance in the first quarter of 2022 was £298.
Despite a rise in weather-related claims and more expensive building materials, the median price for a combination of home and household insurance has risen less than the rate of inflation over the past year, according to the ABI’s insurance premium tracker.
In 2022, home insurers paid out £2.5billion to help customers deal with unexpected events like storm damage, the ABI added.
The tracker takes into account the prices customers pay for their insurance coverage, not the prices they are offered.
At £315, the average home and household insurance package was up £10 or 3% compared to the previous quarter.
Insurers know that times remain difficult for many households due to the rising cost of living
According to recently released Office for National Statistics (ONS) inflation figures, the consumer price index (CPI) rose 10.1% in the 12 months to March 2023, slowing from 10.4% in February.
The Financial Conduct Authority (FCA) home and motorhome insurance pricing rules, introduced on 1 January 2022, ensure that the price paid by contract customers for motor and home insurance is no more than the price paid by an equivalent new customer for the corresponding policy is purchased through the same sales channel, e.g. B. via an insurer, a broker or a price comparison website.
The rules do not set or limit the amount of rewards paid by new or existing customers.
The price of coverage will continue to reflect a number of factors, including claims settlement costs, the ABI said.
Laura Hughes, General Insurance Manager at ABI, said: “Insurers recognize that these continue to be difficult times for many households as they grapple with the rising cost of living.
“The increase in the average combined building and household goods premium over the last year remains below the rate of inflation, despite the aforementioned inflation increases in the cost of many building materials.
“Last year’s storms and the increase in subsidence claims following the summer heatwave have given us a dramatic reminder of the importance of home insurance.
“During these challenging times, anyone concerned about being able to continue paying for their home insurance should speak to their insurer about potential alternative payment options.”
Research released this week by the FCA suggests some people have canceled or reduced their insurance across the board to meet the immediate pressure of rising living costs.
However, this could potentially make them worse off or get them into trouble if something goes wrong.
According to the FCA, in the six months to January this year, 8% of people who took out insurance and protection policies last spring had canceled one or more policies and 7% had reduced their coverage, primarily to save money due to rising living costs.
Some did both – meaning around 6.2 million adults (13%) in the UK who bought policies in May 2022 had their coverage canceled or reduced by January 2023, according to the FCA.
https://www.standard.co.uk/business/money/6-annual-increase-in-average-price-paid-for-home-insurance-b1081927.html 6% annual average home insurance price increase
