Home insurance costs creeping up

12th October, 2005

Home insurance premiums in the UK are becoming more expensive, a new report claims.

Research from the AA shows that premium quotations for buildings rose by one per cent to £205.17 over the past three months, while the cost of contents cover was up by just over two per cent over the quarter to £149.99.

However, the insurer points out that the figure is still below premiums when it launched its AA’s quarterly British Insurance Premium Index eleven years ago. The AA attributes the rise in the cost of policies to increases in premiums from insurers offering the lowest deals.

The AA’s Kevin Sinclair said: 'A 2.15 per cent rise in prices for contents cover represents quite a leap, bearing in mind premiums have varied up or down by only a pound or two over the past two years.'

Consumers are also failing to shop around for home insurance, another survey shows. New research from Privilege Insurance reveals that just 53 per cent of Brits with home insurance (buildings, contents or both) shopped around for an alternative quote the last time they took out a policy, while 42 per cent simply renewed their policy with their existing insurer.

The poll found that 14 per cent of respondents with home cover arranged it through their mortgage provider. Customers purchasing insurance cover directly from insurers were twice as likely to shop around as those who got their cover through their mortgage provider.

Ian Parker, managing director of Privilege Insurance, commented: 'Clearly there is still some inertia in the home insurance market, but double-checking the competitiveness of your renewal quote need only take a few minutes and, by not shopping around, consumers are potentially missing out on making significant savings while maintaining the same level of cover.'

 

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