Fall in the price of home insurance gives some relief to many households battling with cost-of-living rises

The average price paid for home insurance – both buildings and contents cover – has fallen over the last year according to the ABI’s latest Household Premium Tracker figures published today (24 August 2022).

The news will give some respite to households struggling with rising bills as the cost-of-living squeeze tightens its grip.

The ABI’s Tracker is the only survey that looks at the price consumers pay for their cover, rather than the price they are quoted.

The latest Tracker shows that in the second quarter of 2022:
    • The average price paid for buildings insurance was £228. This was a 10% drop over the year since quarter 2, 2021.
    • The average price paid for contents insurance, at £116, also fell by 10% since the same quarter, 2021, and remains at its equal lowest level since ABI started collecting the data back in 2012.
    • For combined buildings and content policies, the average premium was £299, down 7%.
    • While it is still too early to fully assess the impact of the Financial Conduct Authority’s changes to the rules on the pricing of home and motor insurance introduced on 1 January 2022, indications show a fall in average renewal premiums paid by existing customers.

The average renewal premium for contents insurance, at £124, is down £14 since the changes came in. For buildings cover, the average premium, at £247, fell by £27.

For new policies, the average premium for contents insurance has risen by £2 since the beginning of the year; for buildings cover the average price paid, at £184, is up £9 so far this year.

When the rule changes came in, the FCA said that they could lead to some consumers paying higher prices if they previously benefited from significant new business discounts.

Callum Tanner, the ABI’s Manager, General Insurance, said:

“Falls in the average cost of home buildings and contents insurance will be welcomed by households facing rising bills, as the cost-of-living crisis shows no signs of easing.

“Despite more expensive building materials and higher labour costs, property insurers continue to do all they can to deliver competitively priced home insurance.”

 

Kindly shared by Association of British Insurers (ABI)

Main photo courtesy of Pixabay