- Trade body says weather claims are becoming increasingly common and expensive
The average home insurance premium has topped £400 a year for the first time, with insurers blaming a surge in claims on bad weather.
Home insurers have paid out record claims due to extreme weather this year, according to the Association of British Insurers (ABI).
This has resulted in the typical premium for combined buildings and contents insurance increasing by 3 per cent, from £396 per year between April and June 2024 to £407 between July and September.
The ABI said insurers have paid out £4.1 billion in property claims this year, the largest ever in the first three quarters of a year.
It represents an increase of £500 million, or 15 percent, over the same period in 2023.
Most of this was caused by human factors such as theft, or accidents such as fire and home breakage.
On the rise: Home insurance premiums have been steadily rising, increasing pressure on Britons
But £1.3 billion was caused by damage to homes due to storms, floods, heavy rain and frozen pipes, and subsidence due to hot weather.
Payouts for storm and frozen pipe claims totaled £136 million in the third quarter of this year.
Claims for weather damage to businesses amounted to £90 million, while sSubsidence payouts amounted to £66 million – an increase of 11 per cent on the £59 million paid in the second quarter of 2024, and 61 per cent more than in the third quarter of 2023.
The average payout per home insurance claim also rose to a record high of £6,002 this year in the second quarter.
The impact of high claims is reflected in the price of premiums. The average price of combined building and contents insurance increased by 3 percent in the third quarter of the year and by 5 percent in the previous quarter.
The average price of a combined buildings and contents policy for a household in the third quarter of 2024 was £407 – £11 higher than the previous quarter and £56 higher than the same period last year.
The average buildings-only policy now costs £329, an increase of £9 on the previous quarter and £57 more than in Q3 2023.
For content-only coverage, the average price paid was £138 – stable from Q2 2024, but up £11 from Q3 2023.
Policy advisor ABI Louise Clark said: ‘We know that premiums put pressure on household budgets and as an industry we are determined to play our part in tackling the cost pressures behind them.
‘However, the sector cannot do this alone. The government must also take action, and more investment in flood protection and maintenance is urgently needed.
‘We must also take swift action against surface water flooding, and put an immediate end to building on land at high risk of flooding.
‘Flood prevention and resilience measures must be considered in all planning decisions and building standards – to ensure all new buildings are climate resilient.’