The latest British Insurance Premium Index from the AA shows the cost of home buildings cover rose by 3.86% over 2001, while contents premiums were up 4.72%.

This low growth was seen as "unsustainable" by the AA.

For the final quarter of 2002, home buildings and contents premiums were up by 1.08% and 1.07% respectively.

The AA said, on average, householders paid nearly £137 for buildings cover and £110.52 for contents.

It said by shopping around, average premiums could have been as low as £94 and £72.

AA Insurance Services managing director Andrew Briscoe said: "We could see the levels of flooding that hit many homeowners and insurers last year.

"However, we would expect a rise of at least 7% in 2002, as premiums are still at an unsustainably low level."