Combined buildings and contents rates up 1% in fourth quarter of 2015
The recent increase in insurance premium tax (IPT) was to blame for the 1% rise in combined buildings and contents home insurance rates in the fourth quarter of 2015, the ABI said.
The ABI’s Home Insurance Premium Tracker found that the average annual premium for a combined buildings and contents home policy was £316 in the fourth quarter of 2015, up 1% on the third quarter and also up 1% compared with the fourth quarter of 2014.
The ABI said rates for a combined policy would have fallen in the quarter had it not been for the increase in the IPT rate to 9.5% from 6%, which took effect in November 2015.
The IPT increase has the effect of boosting insurance premiums by 3.3%.
The ABI’s premium tracker also found that the average price for a buildings-only policy in the fourth quarter of 2015 was £256, up 3.5% on the previous quarter and up 1% compared with the same quarter of 2014.
The average contents-only rate was £138, up 3.5% quarter-on-quarter and 0.5% year-on-year.
ABI general insurance manager Mark Shepherd said: “Last December’s devastating floods reinforced how vital home insurance is. Insurers continue to help thousands of flood victims get their lives back together with the average payout of around £50,000.
“Events like flooding make it even more important that the rate of insurance premium tax should not be increased. For most people their home is their biggest asset, so anything that increases the cost of insuring it must be pushed back against.”
The ABI’s quarterly premium tracker gathers information from the association’s members, who represent 90% of the home insurance market.