19% annual jump in average price paid for buildings and contents cover
The average price paid for a combined buildings and contents home insurance policy jumped by 19%, or £59, annually in the fourth quarter of 2023, as parts of the UK were battered by storms.
Between October 1 and December 31 2023, the average price paid for this cover was £364, up from £305 in the same quarter a year earlier, according to figures from the Association of British Insurers (ABI). The ABI said insurers are battling cost pressures, with thousands of claims having been generated by recent bad weather and storms.
The latest quarter was dominated by a succession of storms hitting the UK and causing widespread property damage, with £352 million being paid out to support customers whose homes were damaged by Storms Babet, Ciaran and Debi alone, the ABI said. It said the full insured costs of the recent storms will not be known for several months.
A surge in burst pipe claims was also seen at the start of this year, following a cold snap. Rising costs of raw building materials and labour are also adding to cost pressures.
For 2023 as a whole, the average premium paid was £341, compared with £302 across 2022 an increase of 13%, or £39. The household premium tracker looks at the price consumers actually pay for their cover, rather than the price they are quoted.
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Louise Clark, the ABI's policy adviser, general insurance, said: "The succession of storms that have battered the UK in recent months underlines the importance of home insurance, with insurers supporting thousands of customers whose homes and possessions have been damaged or destroyed. Despite rising cost pressures, insurers are totally committed to doing everything they can to continue to offer competitively priced home insurance."
She added: "Flooding caused by extreme weather is devastating when it strikes people's homes. That's why it is vital more is done to increase investment in flood risk management that better protects communities which are at risk, alongside a zero-tolerance approach to building properties in areas of high flood risk."
Earlier this week, the British Insurance Brokers' Association (Biba) called for investment in flood defences to be boosted in the spring Budget on March 6. A Government spokesman said this week: "We're fully committed to protecting communities from flooding, which is why we've doubled our investment to a record £5.2 billion between 2021 and 2027 helping to directly protect over 100,000 properties from recent storms, as well as keeping hundreds of thousands of acres of farmland and thousands of businesses safe."
* An AI tool was used to add an extra layer to the editing process for this story. You can report any errors to [email protected]
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