Home insurance premiums soaring in 2019
Updated October 2019
Home insurance premiums in Q3 2019 leapt by 2.71% on the previous quarter. The average price of combined buildings and contents insurance stood at £145 between July and September. This is up on the second-quarter average of £141.
Premiums are substantially higher than a year ago. In Q3 2018, the average premium was £128, meaning there has been a year-on-year increase of £17, which is just under 13%.
Buildings-only policies have seen sharp premium increases. Year-on-year, average prices have rocketed by almost 19%, from £90 to £106. The increase from Q2 to Q3 was a hefty 4.5%, from £102 to £106.
Average contents insurance prices were up by 8.6% year-on-year, from £60 to £65. On a quarterly basis, there was a 4.6% rise in average premiums from £63.
Premium inflation is being driven by a range of factors, including an increase in subsidence claims, which affects buildings insurance, following last year’s dry summer, and claims for flood and storm damage, which can trigger claims for both buildings and contents insurance policies.
Home insurance, along with car insurance, has been under the spotlight already in Q4 2019. The market regulator, the Financial Conduct Authority, has criticised insurers for charging loyal customers more when they renew their policies than they charge new customers – so-called dual-pricing.
One way to avoid the loyalty penalty that hits customers who renew with the same firm is to shop around every year and take advantage of the lower prices that are on offer through MoneySuperMarket.
Average Premiums by Region
When you insure your property, the main risks to the building 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 risks, with regional variations corresponding to the number of incidents in any given postcode.
Insurers are also concerned 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 lead to an increased number of subsidence claims. 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. A possible reason for this could be that men, when completing a home insurance quote, put in higher amounts for the rebuild value of their property and higher values for their contents. Another possibility is that the continuing gender pay gap means that men can afford to buy bigger houses and fill them with more expensive items. The good news for both genders is that you can save money on your premiums if you shop around at renewal.
All premium price data is based on the median cheapest on screen price for the given period that customers see when running a quote. Premiums are therefore based on MoneySuperMarket customers only and are representative of the UK average.
From October (Q4) 2018 onwards the on screen price also includes add-ons in line with IDD, as such it may not be accurate to compare figures pre and post this date.
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