Average home insurance premiums drop 1.2% despite rise in accidental damage claims

Homeowners across the UK have seen a 1.2% drop in average home insurance premiums thanks to a reduction in break-ins and water damage claims resulting from lockdown, according to Consumer Intelligence.

John Blevins, head of product at Consumer Intelligence, said there is “no doubt” that the Covid-19 pandemic and the lockdowns implemented to combat it are “responsible for these shifts, given there is a reduction in overall claims being made”.

He added that more time spent at home has led to a rise in accidental damage claims: “With any insurance, claims frequency and severity will dictate pricing movements and as the world shifts to slowly reducing Covid-19 restrictions, we will expect to see small shifts in pricing as a result.”

Across the market, average overall premiums sit at £145, however, younger homeowners continue to pay slightly more for their home insurance.

The under 50s demographic, despite a reduction of 2.1% to their premiums over the last 12 months, still hand over, on average, £153 for an annual buildings and contents policy.

It’s just £132 for an average policy for the over 50s. Consumer Intelligence’s older grouping saw premiums fall at the slower rate of 1.6% over the same 12-month period.

Londoners (£215) are now paying almost 50% more for their home insurance when compared against the UK average (£145), according to Consumer Intelligence.

Homeowners in the Northeast fork out just £129 for an annual policy, with the Southwest (£130) and West Midlands (£132) also benefiting from cheaper premiums.

The Southeast (£147) was the only other UK region where homeowners typically paid more than the UK average for their home insurance.

Older homes continue to be expensive to insure as they tend to be more susceptible to issues such as fire damage or roof problems.

Consumer Intelligence’s oldest cohort, Victorian-era properties (built between 1850 and 1895), attracted the highest average premiums at £174 for an annual policy. Those built in the 21st century were the cheapest at just £131.

The two oldest property groupings were also the only ones to see their premiums rise in the last 12 months—2% for those built between 1850 and 1895, and a slight 0.4% increase for properties erected between 1895 and 1910.

Meanwhile, homes built between 1940 and 1955 (-3.2%) and 1955 and 1970 (-3.6%) witnessed the biggest falls to their premiums over the same 12-month period, according to Consumer Intelligence.

Mark Dugdale