Home insurance premiums creep higher in 2018
Home insurance premiums have continued to rise, with the average price of combined buildings and contents insurance up in the fourth quarter of 2018 and over the past year.
The rise is worth noting.The price of a typical combined buildings and contents policy has gone up nearly £20 over the year to £139 in Q4 2018. It shot up more than 10% - or £13 - in the final quarter of 2018 alone. That should be enough to encourage people to check prices before they renew with the same insurer.
Firms tend to reserve their best prices for new customers, which is why it’s always worth shopping around at every renewal. The Competition and Markets Authority told financial regulator the Financial Conduct Authority in December that it should intervene in the home insurance market 'to prevent people being exploited by firms'. But that won't happen fast, so shopping around is still the best option.
It'll certainly be worth keeping a weather eye on home insurance premiums in the coming months. Back in 2013, annual premiums were typically around £150, and they could continue their upwards trajectory, especially if extremes of weather cause flooding or subsidence problems.
Average Premiums by Region
When you insure your property, the main risks to the buildings include storm and flood damage, fire and subsidence. As far as your belongings are concerned, there's the threat of flooding and fire damage, but for most people the biggest risk on a day-to-day basis is burglary. Insurers set their prices according to the likelihood of claims from these dangers, with regional variations emerging according to the number of incidents in any given postcode.
Insurers are worried that climate change will trigger more frequent and more violent bouts of extreme weather, leading to floods, storms and associated damage. Any reductions in rainfall over the long term might also leads to an increased number of subsidence claims. But as can be seen, this overall threat has yet to feed through to premiums. As for burglary, official figures show that the rate of 'acquisitive crime', which includes burglary, has fallen, enabling insurers to trim premiums. In general terms, burglary is more of a problem in urban areas, which is one reason why London has higher premiums than other parts of the UK.
Tap a region to find out more:
How Age & Gender Affect Home Insurance Costs
In 2012, it became illegal for insurance companies in the UK (and across Europe) to take gender into account when setting insurance premiums. So, in theory at least, there should be no difference between the prices paid by men and women for identical policies. In practice, we can see that men tend to pay higher premiums across all age bands, and the reason could be that men, when completing a home insurance quotation, put in higher amounts for the rebuilding value of their property and higher values for their contents. From here on, we’re in the realm of speculation. Is it simply male braggadocio? Or does the continuing gender pay gap mean that men can afford to buy bigger houses and fill them with more expensive items? The good news for both genders is that premiums are on the way down if you shop around at renewal.
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Our top home insurance guides
Buildings insurance provides cover in the event your home is damaged by flood, fire, subsidence, storm or vandalism. Find out more with our guide.
Whilst contents insurance isn't compulsory, it offers valuable protection for your belongings in the event they were stolen or damaged. Read our guide.
Confused about home insurance and the level of cover you might need? Our guide will help you to find the right insurance to suit you at the right price.
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