Home insurance premiums are increasing due to rising claims costs and gold and jewellery prices, according to Consumer Intelligence.
Average home insurance costs rose 8.5 percent to £131 during the year to October, despite only a 3 percent rate of inflation for the economy as a whole.
Consumer Intelligence analysts found that inflation is increasing the cost of repairs as claims for water leaks damage grow, with more homeowners installing bathrooms and wet rooms.
The rising cost of gold and diamonds is also hiking the cost of jewellery claims, while fraudulent claims are another issue, particularly among younger demographics.
Average premiums in London are the highest at £168—41 percent more expensive than the £119 in Southwest England, according to Consumer Intelligence.
Prices are rising fastest in Southeast England and Wales, where premiums are up to 10.6 percent higher than last year, while Scotland is seeing the lowest price rises at 5.6 percent.
Older homeowners now pay £127 for their insurance, while the under 50s pay £133, with average premiums increasing 8.4 percent and 8.6 percent, respectively, over the past year.
Customers can take comfort from the fact that home insurance costs are still slightly lower than they were three years ago, according to Consumer Intelligence, whose data is used by the Office for National Statistics to calculate official inflation statistics.
Owners of newer properties built after 2000, meanwhile, pay average premiums of £114 due to tighter building regulations.
John Blevins, pricing expert at Consumer Intelligence, said: “The home insurance market remains very competitive but customers can expect prices to continue to rise in line with inflation.
“Claims costs are increasing but there is no one major factor driving the market. Some trends are emerging, however, including escape of water claims and the cost of jewellery claims driven by price increases for gold and diamonds.
Blevins added: “Fraud also impacts home insurance claims in a similar fashion to motor—although claims tend to be smaller in severity, but greater in frequency.”
Consumer Intelligence reported a hike in car insurance premiums earlier this year.
Drivers were facing average insurance bill increases of 9.4 percent—more than four times the rate of inflation.