Home insurance falls in 2005

11th January, 2006

After a year of small rises and falls, home insurance at the end of 2005 cost slightly less than it did 12 months earlier, recent figures show.

Premiums for home insurance remained static over the last quarter of 2005, having been on the rise during the previous three months, according to the AA British Insurance Premium Index.

The average buildings insurance premium therefore stood at £206.78 at the conclusion of 2005, down by close to £2 on what the average was at the beginning of the year.

Kevin Sinclair, managing director of AA Insurance, commented: 'Some commentators have predicted sharp rises in home premiums because of subsidence or flooding, but these have simply not materialised.

'Rises following some extreme weather soon settled back to their previous levels. It will take a widespread event of hurricane proportions to significantly affect insurance premiums, although, of course, this can never be ruled out.'

As crime rates fell in 2005, so did the cost of contents insurance, with the average premium 66 pence (or 0.43 per cent) cheaper at the end of the year than it was at the beginning.

Buildings insurance incredibly now costs only 30 pence more than it did when the AA launched its index back in 1994, while the average contents insurance premium costs only £7 more than it did then.

 

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