Britain’s changing weather is likely to keep pushing up the price of home insurance as homeowners make more claims. In fact, the cost of home insurance has crept up nearly 10% since the start of 2010.
The price of combined home and buildings insurance is now an average £194.
Insurers blames the weather as homeowners have had to tackle floods, freezing conditions, high winds – and now a minor earthquake measuring 3.5 on the Richter scale in the Lake District.
As the climate has changed, more homeowners have claimed for weather-related damage.
The message from many insurers is if you are looking for cheaper home insurance, don’t bother because the cost will continue to rise, especially when the cost of burst pipes from the current cold snap are added in to the equation.
Floods of protests over spending cuts
For most of us, home insurance costs are tied in to the weather – especially if you live in an area under threat from floods.
The government is planning to cut millions from flood defence budgets as part of the comprehensive spending review that will leave about 5 million homes vulnerable.
Insurers have already indicated that this could make home insurance difficult to find for many and more expensive for the rest.
The British Insurance Brokers Association says the banking crisis has also played a significant role in rising insurance costs.
Insurance firms deposit cash collected in premiums to earn investment income, but the banking crisis has depressed the rate of return on investments that has seen them lose some of the income they would normally put back in to settling claims.
Homeowners looking for the best value buildings or contents insurance should check out cover and pricing options with a broker or online comparison site before renewing a policy.
Your current insurer’s renewal notice will probably include an automatic price hike regardless of your claims history, but another firm might offer a discount to tempt you to switch insurers.