One in four British households has no home contents cover, finds the Association of British Insurer's (ABI) annual report on trends in household insurance spending.

There was very little change in the cost of buildings and contents cover. Building insurance costs have risen by only £4 since 1998 to £158 in 2000. Contents insurance spending rose slightly more over the same period by £5 from £127 in 1998 to £132 in 2000.

Households in the Greater London area tend to have the highest expenditure on insurance, but the lowest proportion of households with expenditure for most classes of insurance.

“This is partly explained by the higher-than-average number of young people living in the capital, a group that is less likely to buy insurance,” said the report's author Iain Davanna.

Motor insurance showed the largest spending rise, a £46 increase over the same two-year period, with households paying an average motor premium of £370 in 2000.

Overall, the average household spending on all general insurance products increased by £22 (3.7%) to £590 between 1999 and 2000, according to the ABI's latest quarterly report on insurance trends.

More people are taking out mortgage payment protection insurance (MPPI) but fewer have private medical insurance (PMI) and personal accident cover.

Davanna attributes this rise to “the large increase in the cost of bodily injury claims resulting in heavy underwriting losses being reported”.

MPPI also recorded one of the largest spending increases, growing from £255 in 1998 to £278 in 2000, and is now held by a record 16.6% of households.

Despite the 3.7% above-inflation increase, spending on some insurance products fell.

The proportion of households with PMI dropped from a recent peak of 11% in 1998 to 8.9% in 2000, although average spending has increased from £454 to £608 over the same period.