Home insurance price cuts could be about to end as rising subsidence claims from last year’s hot summer send bills higher, according to Consumer Intelligence.
New data from the insurance intelligence provider shows that average premiums dropped 1% to £137 in the year to January, as insurers kept prices low to compete for business, but the last six months have seen increases of 1.7%, pointing to the likelihood of higher premiums in the future.
Last year’s prolonged dry and sunny weather is driving an increase in subsidence claims across the industry and are expected to feed through into premium rises, Consumer Intelligence said.
Customers in Wales and the Southwest are paying the lowest annual bills at £121 and £123. Wales has experienced the biggest price falls with premiums down 4.3% on a year ago, while in the Northeast they fell 3%.
Londoners pay the highest annual bills at £181 with prices up 1% in a year, while customers in the East Midlands and Southwest saw price rises of 0.8% and 0.5%.
Premiums for newer homes are the lowest with average prices for houses built since 2000 at £128. Customers with houses built before 1895 can expect to pay 30% more at £167.
John Blevins, a pricing expert at Consumer Intelligence, pointed out that competition in the home insurance market is keeping keeping premium increases to a minimum, with only a few areas of the country seeing limited price rises.
“But the past six months has seen premiums starting to rise and that may be an indication of things to come with all parts of the country likely to be affected.”
“Claims costs remain the main driver of premiums that we see, and the industry as a whole is experiencing a rise in subsidence claims which are costly for insurers and that will have an impact on total claim costs and prices.”