Combined buildings and contents premiums fell 8.4% year on year

Winter flood and storm clams failed to halt the downward slide in household premiums according to the first quarter 2014 edition of the AA British Insurance Premium Index.

The average Shoparound premium for combined buildings and contents cover fell 8.4% to £170.59 in Q1 2014 from £186.14 in Q1 2013.

Average buildings rates were down 6.5% to £122.06 (Q1 2013: £130.61) and contents rates were down 7.4% to £64.17 (Q1 2013: £69.30).

The Shoparound average is based on the five cheapest quotes from aggregators, brokers and direct insurers.

AA Insurance director Simon Douglas said: “What is clear from these figures is that the flooding earlier this year – which was widely expected to affect home insurance premiums – has made no difference to the downward trend that has now continued for two years.

“The number of claims for flooding was much lower than in 2007, which cost the industry £3.3bn.  But it has highlighted the urgency of ensuring that the Flood Re proposals, designed to ensure that those living in flood-prone locations can obtain affordable cover, are properly debated and enter the statute book as soon as possible.

“It also underlines the importance of continued investment in flood defences as extreme weather becomes a more frequent feature of the British climate.”

Douglas thinks the downward trend will level off but doesn’t expect to see significant increases in the foreseeable future.