Cost of home insurance continues to fall

Figures from the ABI’s latest Quarterly Average Household Premium Tracker* show:

• The average annual premium paid for a combined buildings and contents policy was £287, or £5.52 a week. This is down 1% on the previous quarter and down 2% compared with the same quarter last year.

• The average annual premium paid for buildings insurance was £225 or £4.33 a week. This is a reduction of 3% compared with the last quarter of 2014, and also down 3% on the first quarter of 2014.

• For contents only insurance, the average annual premium paid was £118, or £2.27 a week. This is down 5% on the final quarter of last year and is 8% lower than the first quarter of 2014.

Mark Shepherd, the ABI’s General Insurance Manager, said:

“The scale of loss people suffer if their home is flooded or catches fire can be almost unimaginable. Some families lose not only the roof over their heads but also most of their personal possessions in a matter of minutes. When the worst happens, home insurance is a life-line.

“The cost of this vital protection has continued to fall, meaning people can on average insure their homes and belongings -  and give themselves peace of mind - for less than the cost of a cup of coffee a day.

“The average insurance pay out for a home flooded during the 2013/14 winter floods was around £30,000. In the aftermath insurers dealt with 18,700 claims for flooding and nearly 450,000 for storm damage. Claims costs for other perils can also be very high, with an average claim for domestic fire damage of £11,000. Despite this, the expertise of insurers in planning for such events and competition within the sector is ensuring millions of families can benefit from affordably priced protection for their home and their possessions.”