The data shows the average cost increase for both building and contents insurance.

In the last quarter of 2023, the average cost of a home insurance policy that covers both buildings and contents rose by 19%, equivalent to £59 per year. This increase was seen as certain areas of the UK experienced severe storms.

According to data from the Association of British Insurers (ABI), the average cost of this coverage increased from £305 to £364 between October 1 and December 31, 2023, compared to the same quarter in the previous year.

According to the ABI, insurance companies are facing financial challenges due to the high costs associated with the large number of claims caused by recent severe weather and storms.

The most recent quarter was defined by a series of severe storms hitting the UK and resulting in extensive damage to properties. The Association of British Insurers reported that a total of £352 million was paid out to assist customers whose homes were affected by just three storms, namely Babet, Ciaran, and Debi.

The complete amount covered by insurance for the recent storms will not be determined until several months later.

There was an increase in insurance claims for burst pipes at the beginning of this year, coinciding with a period of cold weather.

The increasing expenses of fundamental construction materials and workforce are contributing to the rise in costs.

In total, the average amount paid for 2023 was £341, which is £39 higher than the average of £302 in 2022. This represents a 13% increase.

The household premium tracker examines the actual cost paid by consumers for their coverage, rather than the quoted price.

Louise Clark, the general insurance policy adviser for the ABI, emphasized the significance of home insurance in light of the series of severe storms that have hit the UK in recent months. She noted that insurers have been providing assistance to numerous customers whose homes and belongings have suffered damage or destruction.

“Even though costs are increasing, insurance companies are fully dedicated to finding ways to maintain affordable rates for home insurance.”

She stated, “The impact of extreme weather-related flooding on people’s homes is catastrophic. This emphasizes the need for increased investment in flood risk management to better safeguard at-risk communities. Additionally, a strict stance should be taken against constructing properties in high-risk flood zones.”

Biba, the British Insurance Brokers’ Association, recently urged for an increase in funding for flood protection measures in the upcoming spring Budget on March 6.

On Monday, a representative from the Government stated that they are fully dedicated to safeguarding communities against flooding. This is demonstrated by our increase in investment to a historic amount of £5.2 billion for the years 2021 to 2027. This investment will directly protect over 100,000 properties that have been affected by recent storms, and will also ensure the safety of hundreds of thousands of acres of farmland and thousands of businesses.

Source: independent.co.uk