Home insurance premiums drift

Heavy discounting and good quoted results are keeping the lid on both buildings and contents cover and as a result, recent premium increases have been cancelled out, according to the AA.

However, Kevin Sinclair, managing director of AA Insurance, doesn’t believe the recent widespread flooding will necessarily signal an immediate rise in home insurance premiums.

“It will take a sharp increase in the number of extreme weather events of the sort we have seen in Yorkshire and the Midlands to have an impact,” he says

“But I am concerned at the number of people counting the cost of the recent floods who say they had no contents cover while many industry experts believe that up to two thirds of those who do have cover are under-insured. Recent events show that severe weather can affect anyone so while premiums remain low, it would be a good time for people to review their home insurance.”

Home buildings insurance

Over the first three months of 2007, the index of average quoted premiums fell by 1.89 per cent to £206.68 (over previous quarter: down by 0.78 per cent to £210.66)

Premiums have fallen by 0.20 per cent year-on-year

The Shoparound premium (an average of the lowest three premiums for each risk quoted in the Index) fell by 3.45 per cent to £137.40

Home contents insurance

The index of average quoted premiums fell by 1.32 per cent to £147.14 (over previous quarter: up by 1.26 per cent to £149.13)

Premiums have fallen by 3.22 per cent year-on-year

The Shoparound premium (an average of the lowest three premiums for each risk quoted in the Index) fell by 3.37 per cent to £81.13

“Home insurance represents particularly good value having changed little over the past decade and while the trend of car insurance is firmly upward, there are still deals to be had,” adds Kevin Sinclair: “Things have never been better for customers in terms of choice but make sure you’re comparing like for like and not just price for price.”