Claims costs of 1.2% could hike prices for annual premiums

Weather and escape of water claims were the biggest drivers for home insurance premiums.

Although average premiums dropped this year up until October, the last three months has seen increases in claims costs, with last winter feeding through to prices.

This was according to recent analysis from data analytics firm, Consumer Intelligence.

Escape of water

John Blevins, Consumer Intelligence pricing expert, explained that over the past 12 months “claims costs have been the largest driver of rates” with weather and escape of water dictating much of this.

Although home insurance bills dropped by 0.4% to £137 this year, claims costs were up 1.2%, which could hike prices for annual premiums.

He added: “The last three months have seen an overall slight rise in premiums as claims costs from earlier in the year come through but generally pricing for buildings and contents combined policies remain fairly static as this is still a very competitive marketplace.”

Aviva recently acquired the majority stake of Neos revealing plans to tackle water leak claims using smart connected home devices.

Escape of water costs insurers £3.9m per day according to the ABI.

A spokesperson for the ABI, said: “While thankfully homeowners have not faced any significant flooding in the last year, the weather continues to a major factor for home insurers.

”The ‘Beast from the East’ led to a spike in cold weather related claims, and the record-breaking summer drought points to a significant rise in subsidence claims. Despite this, home insurance remains very competitive, with homeowners urged to shop around for the best deal for their needs.”

Average premiums and price rises around Great Britain





East Midlands



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South East



Yorkshire & Humberside



South West



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London remains most expensive

Its analysis also found that London is paying 48% more a year than Wales which slipped by 4.3% and the North East which saw a 2.6% decrease.

Londoners saw price rises of 2.8% in a year costing £183 whereas the East Midlands saw a 1.7% increase to £130.

It follows the data analytics company’s previous research in Augurs this year which found that London remains the most expensive place in Britain for home insurance.

Blevins added: “London continues to see the highest rate increases with crime rates and specifically burglary generally having a larger impact in urban areas. These crimes however are reducing as home security technology is getting better and more accessible.”

Customers are now paying around 1.9% less for home insurance than in February 2014 when Consumer Intelligence first began collecting prices.