Competitive home insurance premiums were -4.4% lower in September 2026 than a year earlier, according to Defaqto’s latest Market Pricing data, with continued reductions raising questions about how insurers balance competition against pressure on claims costs.
The average of the five most competitive quoted premiums for combined buildings and contents insurance is now -16.9% below its level two years ago. Although reductions have been less consistent and less pronounced over the latest year, the market has continued to soften.
Prices fell by -2.4% during the third quarter, with reductions in each month – -1.0% in July, -0.9% in August and -0.4% in September.
June’s increase did not develop into a sustained upward trend. However, the smaller monthly reductions towards September suggest that prices could be approaching a more stable position.
Stephen Kennedy, Director at Defaqto, said:
“Competitive home insurance premiums are almost 17% below their level two years ago and are still falling. That creates a difficult balance for insurers when inflationary pressures and uncertainty over claims costs remain.
“Weather-related claims are a particular concern for home insurers. Subsidence following dry, hot summers can take time to emerge, while flooding and storms add further uncertainty. Pricing decisions need to account for claims that may develop over time, as well as those already being reported.
“There is an argument for premium increases to reflect those pressures. Continued market reductions should prompt insurers to examine whether their pricing adequately reflects the claims costs they expect to incur.”
Annual provider movements range widely
The annual competitive average masks substantial differences between individual insurers. Over the 12 months to September, price movements examined by Defaqto ranged from a reduction of -20.2% to an increase of +12.1%.
Quarterly movements also varied widely with providers reducing prices by between -0.1% and -15.7%, and others increasing prices by between +1.8% and +3.5%.
Francis Luery, Product Manager at Defaqto, said:
“The 4.4% annual fall is a useful measure of competitive market pricing, but individual providers have taken ver