Home insurance premiums rise after severe winter for weather damage

Home insurance premiums rose in the first quarter of 2024 following a severe winter for weather damage.

That was according to the ABI, which said that the average premium for buildings and contents cover increased 3% to £375 in Q1 2024.

This was slightly less than the 4% increase recorded in Q4 2023, although the latest figure pushed the year-on-year rise up to 19%.

The data, which was based on prices paid rather than quotes, also showed that buildings-only cover rose 5% to £298.

Storms and flooding

The rises came after storms Babet, Ciaran and Debi, which struck in the final three months of 2023, caused £352m of damage to homes.

The ABI said largest element of weather-related damage was caused by flooding. 

The association has called on the government to ensure that flood defence and maintenance receives at least £1bn a year to keep pace with climate change.

“However, since 2021, public investment in flood defence work has fallen short of this, meaning each year we fall further behind in our fight to resist floods,” the ABI said.

Louise Clark, general insurance policy adviser at the ABI, added: “The longer we put off vital investment in flood defences, the more that flood damage will ultimately cost the consumer.

“An increase of the tax on insurance policies – insurance premium tax – was earmarked by government in 2016 to fund flood defences. This tax brings in billions for HMRC yet flood defence investment lags behind.

“There are other important steps we need to consider too, including reform of planning laws to prevent home building on high flood risk areas and a greater focus on climate-resilient properties.”