It would take ‘a very severe winter’ to reverse downward trend in home insurance premiums, broker says
Claims from the severe storm that ripped through southern England yesterday are unlikely to stop home insurance premiums falling, according to broker AA Insurance.
The storm, dubbed St Jude, has caused widespread damage to houses and cars, as well as severely disrupting transport and electricity services.
AA Insurance director Simon Douglas said: “Severe weather is factored in to insurers’ calculations and, on the whole, we have enjoyed a generally benign summer, so home insurance premiums are not likely to be affected.”
According to the latest AA British Insurance Premium Index, average buildings insurance rates were down 5.8% for the 12 months to 30 September 2013.
Contents rates fell 3.8% and combined buildings and contents rates declined 6.6% over the same period.
Douglas said: “I believe that it would take a very severe winter to reverse the downward trend in the short term.
“We are in a competitive market and rate reductions are still being made, but in the longer term, major flooding, for example, could lead to sharp premium rises, particularly for buildings cover.
“This is what happened after the 2007 floods. Otherwise, home premiums will continue to offer good value for money.”