Government tax rises are driving home insurance prices higher despite the mild winter keeping claim costs down, new analysis¹ from insurance market research experts Consumer Intelligence shows.
Average home insurance costs rose 2% — below the 2.3% rate of inflation for the economy as a whole — in the year to April to £121 and were virtually unchanged in the past three months.
Prices are rising fastest for over-50s householders who are seeing above inflation increases of 3.6% to £117 compared with just 1% for under-50s to £124.
The relatively mild winter with low claims for storm damage would have limited price rises but an Insurance Premium Tax rise in October and another due in June taking the rate to 12% will keep costs rising, Consumer Intelligence warns.
Consumer Intelligence — whose data is used by the Government’s Office for National Statistics to calculate official inflation statistics — says prices rose by just 0.2% in the three months to April and even fell for the under-50s.
Home insurance customers in the North East are experiencing the highest increases in premiums with average rises of 3.3% in the past year while prices rose 3.2% in Yorkshire & Humberside.
Londoners pay the highest premiums at £144 while householders in the North West have seen prices rise by just 0.9% in the past year.
But there’s good news as home insurance costs are still 7.7% lower than in February 2014 when Consumer Intelligence first analysed data.
John Blevins, Consumer Intelligence pricing expert, said: “There has been little movement over the last quarter, and prices have remained fairly static.
“The benign weather has helped to keep premiums down, although it is worth noting that IPT rates have pushed premiums up by 2% in the last 12 months and we expect premiums to rise further in June when it increases to 12%.
“There is no indication that prices will come down and we expect another year of relative stability although new rules making insurers include last year’s premium with renewals may have some impact on new business rates.”
The table below shows average premiums and price rises around Great Britain.
| REGION | CHANGE IN YEAR TO APRIL | AVERAGE PREMIUM (FIVE CHEAPEST) |
| North East | +3.3% | £114 |
| Yorkshire & Humber | +3.2% | £125 |
| South West | +2.9% | £115 |
| South East | +2.4% | £123 |
| Eastern | +2.2% | £119 |
| Wales | +2.2% | £114 |
| London | +1.9% | £144 |
| East Midlands | +1.7% | £111 |
| West Midlands | +1.7% | £114 |
| Scotland | +1.6% | £122 |
| North West | +0.9% | £120 |
| GREAT BRITAIN | +2.0% | £121 |
Notes to Editors
¹The cheapest premiums were calculated by comparing the prices offered for 2,100 people by all the major Price Comparison Sites and key direct insurers. The top 5 prices for each person were compared to the previous month’s top 5, then these variations averaged to produce the index.
For further information, please contact:
Consumer Intelligence
Elinor Zuke
07863 350270
Kevan Reilly / Phil Anderson
Citigate Dewe Rogerson
020 7638 9571
About Consumer Intelligence
Consumer Intelligence conducts consumer surveys and benchmarks price and service performance providing unique insights into competitor pricing and customer experiences, their attitudes, opinions and behaviours. For more information, visit the web site www.consumerintelligence.com