The average price paid for combined buildings and contents insurance was £300 last year, according to trade association
The ABI believes the insurance industry is continuing to support its clients through tough economic times as household insurance premiums have fallen to their lowest level in over a decade - despite the costs of extreme weather events last year.
The trade association today (15 February 2022) released its latest Household insurance premium tracker, which reported that the average price paid for annual home insurance has dropped to its lowest since the ABI started collecting this data back in 2012.
Although the ABI noted that the FCA’s new rules around home and motor cover prices - which were introduced in January 2022 - have had an effect on premiums, the association explained that its findings also highlighted the effort the industry had gone to support its clients during the cost of living crisis.
Laura Hughes, manager for general insurance at the ABI, said: “Last year was a stark reminder that the only thing predictable about the UK’s weather is that no one knows what it will do next.
“Despite the amounts paid out last year and a rise in the costs of building materials and labour, home insurers will continue to do all they can to offer competitive deals to customers.
“Insurers appreciate that these continue to be tough times for many households [in terms of] coping with the rising cost of living.”
Weather impact
The ABI’s tracker examines the price consumers pay for their cover, rather than the price they are quoted. It is based on data returns from around 30 of its members that write home property insurance.
It found that last year, the average price paid for combined buildings and contents insurance was £300 per annum - down 6% on 2021. The average prices for separate buildings (£228) and contents policies (£116) were also at an all-time low.
These competitive prices were despite a series of extreme weather events, the ABI explained.
In February 2022, Storms Dudley, Eunice and Franklin led to 170,000 claims for property damage, with insurers paying out £473m to support affected customers.
The summer months, meanwhile, saw the UK experience a heatwave. The Met Office stated in September 2022 that the summer of 2022 was “the joint warmest summer on record according to mean temperature”, with a peak temperature of 40.3°C recorded in July.
These record breaking temperatures led to several insurers reporting or predicting a significant rise in subsidence claims. The full costs of these are likely to materialise during 2023.
This hot spell was followed by a severe cold snap last December, causing in a surge in claims for damage caused by burst frozen pipes.
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