Home insurance premiums are going up
According to the new figures from AA Insurance, the cost of buildings cover rose 2.4% to £181 over the three months to the end of September (and 5.2% over 12 months), while contents cover rose 1% to £242 (7.2% over 12 months).
Simon Douglas, director of AA Insurance, said that the wet summer is a sharp reminder that the industry must be prepared for more of the same over coming years. Indeed, The Environment Agency and the Climate Vulnerability Monitor predict flooding will get considerably worse over the next decade, with the cost of flood damage in Britain likely to triple by 2030.
“I am very concerned that no agreement has yet been reached in finding an affordable option to the ‘statement of principles’ between the insurance industry and the Government, which ensures that families in flood-prone properties can continue to obtain flood cover,” said Douglas. “This expires in June next year and if no agreement is reached soon, could lead to the most vulnerable homes becoming uninsurable.
“To put this into context, insurers measure flood risk in terms of events likely to happen over a period of years. Even if a home is at risk of flooding once in a century, given that the average cost of repairing a flood-damaged property is £20,000 that is the equivalent of £200 per year, on top of the cost of covering other risks. It’s vital that the Government and local authorities make tackling the problem at source by investing in flood defences a priority.”
He added that £38 million was spent on flood defences in Carlisle following floods there in 2005 and that last month the new defences kept around 1,500 homes in the city dry.
In terms of buildings insurance, every region of the UK has seen premiums rise, according to the same report. The most expensive region in which to insure a home is London and the South East, with the biggest regional premium increases in Yorkshire and East Anglia. Wales and the West Country continue to be the cheapest regions to insure a home. The highest premium for contents cover is in the Central and North West England.contents insurance, home insurance
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