The cost of home insurance in the UK increased by 21% year-on-year between July and September 2024, according to a report from Compare the Market.
Average premiums rose from £187 in the third quarter of 2023 to £227 during the same period in 2024. While the increase is notable, it reflects a slower rate of growth compared to the second quarter of 2024, when premiums rose 32% year-on-year.
Homeowners in Northern Ireland experienced the largest year-on-year increase in premiums during the third quarter, with costs rising by 45% to an average of £450. Other regions with significant increases included Scotland, the South East, East Anglia, and Greater London, where premiums rose by 25%, 25%, 24%, and 24%, respectively.
Despite the higher costs, the pace of increases slowed compared to the second quarter. From April to June, premiums in Northern Ireland grew by 62% year-on-year, while Greater London saw a 39% rise. In Scotland and the South East, increases reached 35% and 36%, respectively, during that period.
Yorkshire and the Humber also remained among the most expensive regions for home insurance, with average premiums of £384, while Greater London and the South East followed at £361 and £254, respectively.
Bedsits saw the steepest rise in home insurance premiums, increasing by 50% year-on-year in the third quarter of 2024 to an average cost of £448. Detached bungalows, ground floor flats, and top-floor flats also recorded substantial increases of 32%, 31%, and 28%, respectively.
However, growth in premiums for most property types slowed compared to the second quarter. For instance, ground floor flat premiums had risen by 42% year-on-year in Q2, compared to 31% in Q3. Detached bungalows and top-floor flats similarly experienced slower growth, with increases of 38% and 32% in Q2, respectively.
For properties that have previously experienced flooding, the cost of insurance continued to rise at a faster pace. In the third quarter of 2024, premiums for such homes averaged £485, a 30% year-on-year increase, up from a 27% rise in the second quarter.
This trend aligns with broader increases in claims for weather-related damage. The Association of British Insurers reported record claims for weather-related incidents in 2023, totalling £573 million.
Helen Phipps, director at Compare the Market, noted that while the deceleration in premium growth may provide some relief, home insurance remains costly for many households, particularly those already facing high living expenses.
“People with homes that have been previously flooded are particularly vulnerable, with quarterly price rises not yet showing signs of slowing. This reflects a long-term trend of increasing home insurance claims for weather-related damage, which reached a record £573 million last year, according to the Association of British Insurers,” she said.
Phipps suggested several steps to manage rising costs, including shopping around for better deals, combining contents and buildings policies where possible, and exploring the government-backed Flood Re scheme, which aims to make insurance more affordable for homes at risk of flooding.
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