19th Jan 08

Latest findings from the AA British Insurance Premium Index show that premiums for home insurance have once again increased.

In the fourth quarter of 2007, average quoted premiums for home buildings insurance rose by 1.4% (to an average of £218.60 for an annual policy). This follows a rise of 3.0% over the previous quarter – the largest single increase since the Index began in 1994. Home contents premiums rose by just 0.4% to £150.57. These rises reflect the £750 million domestic property claims following last summer's flood claims.

The summer 2007 floods brought a deluge of claims, as they displaced 14,500 families into temporary accommodation while their homes were repaired and refurbished. "The average cost of each of these claims is approaching £52,000.

John Close, Insurer Relations Director at the AA commented:

"Buildings insurance premiums are at their highest since the Index began but I'm surprised that premiums have risen so little over the past quarter. I hope that the government's Climate Change Bill includes robust provisions to ensure that new buildings are more flood and storm resilient, particularly after the renewed flood threats of the past few days. Local authorities must also think through where new housing is built – it will help no one if families find their homes are uninsurable because of where they are located."