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- Trade body says climate claims are becoming more common and costly
The average home insurance premium has surpassed £400 a year for the first time, with insurers blaming a wave of claims on the bad weather.
Home insurers have paid out record claims this year due to extreme weather, according to the Association of British Insurers (ABI).
This has led to the typical combined buildings and contents insurance premium rising by 3 per cent, from £396 per year between April and June 2024 to £407 between July and September.
The ABI said insurers have paid out £4.1 billion in property claims this year, the largest amount recorded in the first three quarters of a year.
It represents an increase of £500 million, or 15 per cent, on the same period in 2023.
Most of this was caused by human factors such as theft, or accidents such as house fires and break-ins.
On the rise: Home insurance premiums have risen steadily, adding pressure on Brits
But £1.3bn was caused by damage to homes caused by storms, flooding, heavy rain and frozen pipes, as well as subsidence due to hot weather.
Payments for storm and frozen pipe claims reached £136m in the third quarter of this year.
Claims for climate damage to companies were £90 million, while sUbsidence payments amounted to £66 million, an increase of 11 per cent on the £59 million paid in the second quarter of 2024, and up 61 per cent on the third quarter of 2023.
The average payout per home insurance claim also rose to a record £6,002 this year, in the second quarter.
The impact of high claims is reflected in the price of premiums. The average price for combined construction and home contents insurance increased 3 percent in the third quarter of the year and 5 percent in the previous quarter.
The average price for a combined buildings and home contents policy in the third quarter of 2024 was £407 – £11 more than the previous quarter and £56 more than the same period last year.
The average buildings-only policy now costs £329, an increase of £9 on the previous quarter and an increase of £57 on Q3 2023.
For content-only coverage, the average price paid was £138, stable from Q2 2024, but £11 higher than Q3 2023.
ABI Policy Advisor Louise Clark said: “We know premiums are putting pressure on household budgets and, as an industry, we are determined to play our part in tackling the cost pressures behind them.
‘However, the industry cannot do it alone. The Government must also take action and more investment in flood defense and maintenance is urgently needed.
‘We also need swift action against surface water flooding and an immediate end to construction on land at high risk of flooding.
“Flood prevention and resilience measures should be considered in all planning decisions and building standards, to ensure all new buildings are climate resilient.”
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