The average home contents insurance is at a 10-year low – AA British Insurance Premium Index
The average home contents insurance premium has fallen to a 10-year low, with the average combined buildings and contents premium falling by 8.5% over the 12 months to December 2013.
According to the AA British Insurance Premium Index, the cost of buildings, contents and combined home policies fell during the last quarter of 2013 and has either remained static or fallen every quarter for the past two years.
The AA Shoparound Index update for Q4 2013 revealed the average UK home premium was £165.34 as at 31 December.
Individual buildings insurance was down 2.6% to £136.20 and contents was down 2% in the same period to £65.
This fall has been attributed to the low number and cost of severe weather claims.
Additionally, AA Insurance director Simon Douglas says he expects the downward premium to continue because the market continues to be competitive.
The increased investment from the government into flood defences also helped to protect about 220,000 homes in December 2013 that would otherwise have been inundated by tidal surges or flooding from rivers and other watercourses.
“This is good news for policyholders and means that there are deals to be done for those who shop around for their covers,” Douglas added.
“Homes have felt the full force of the elements over recent weeks, with insurers expected to meet claims in the order of £400m. But over the year as a whole, the number and cost of severe weather claims are, according to some estimates, about 12% lower than in 2012 and significantly lower than the 2007 flood disaster.
“This has benefited householders, with the average Shoparound quote for home cover falling. Indeed, home insurance continues to represent extremely good value for money, with premiums in some cases at an all-time low.”
But Douglas adds the recent storms highlight the importance of the Flood Re Scheme being incorporated into the Water Bill, in ensuring that homes at greater risk of flooding will continue to obtain affordable home insurance.