Home owners and insurers a like are feeling the impact of the winter storms, as the average home insurance premium increased by 4% in the final quarter of 2023*.
A stormy winter
The last three months of the year saw six storms officially recorded by the Met Office, with the first three alone causing 36,000 home insurance claims to be made. As a result of Storms Babet, Ciaran and Debi, £352m was paid out by insurers. The average premium for combined building and contents insurance therefore went up by 4% to £364.
Higher cost of rebuilding
Storms are not the only factor affecting the price of cover – labour costs and raw materials are also becoming increasingly expensive. Compiled by the Building Cost Information Service, the House Rebuilding Cost Index (HRCI), which measures changes in the price of rebuilding costs, shows that in the two years to January 2024 the Index increased by 21%.
Cover still competitively priced
Despite the higher figures, insurers are doing their best to keep home insurance at a competitive price. In fact, statistics show that the average premium fell between 2014 and 2023, once inflation has been taken into account.
ABI call for preventative measures
As we look to the future, property damage due to extreme weather is unfortunately
going to be more common due to climate change. Louise Clark, ABI’s Policy Adviser, has said more action needs to be taken to protect homes.
She commented, “Flooding caused by extreme weather is devastating when it strikes people’s homes. That’s why it is vital more is done to increase investment in flood risk management that better protects communities which are at risk, alongside a zero-tolerance approach to building properties in areas of high flood risk.”
*ABI, 2024
Approver Quilter Financial Services Limited & Quilter Mortgage Planning Limited. 26/04/2024
