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

• The average buildings and contents policy now stands at £145
• Londoners pay almost 50% more for their home insurance when compared against the UK average

Homeowners across the country have seen a 1.2% drop in average home insurance premiums thanks to a reduction in break-ins and water damage claims, resulting from the Government’s stay-at-home directive, analysis from data analytics expert Consumer Intelligence shows.

“No doubt, the current pandemic and resulting lockdown is responsible for these shifts, given there is a reduction in overall claims being made,” says John Blevins, Head of Product at Consumer Intelligence, the insurance research experts.

Blevins, however, has noticed that with more people at home for longer periods – working, home-schooling, doing DIY and even exercising – it 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,” says Blevins.

Age differences

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. Our older grouping saw premiums fall at the slower rate of 1.6% over the same 12-month period.

Into the regions

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

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

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

Property age

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

Our oldest cohort, Victorian-era properties (built between 1850 and 1895), attracted the highest average premiums at £174 for an annual policy. While those built in the 21st century were the cheapest to insure at just £131 for an annual policy.

Our 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 1940-1955 (-3.2%) and 19551970 (-3.6%) witnessed the biggest falls to their premiums over the same 12-month period.

The table below shows average premiums and price rises around Great Britain