Home insurance prices fall to record lows, says ABI

Both figures were record lows with buildings insurance coming in at £225 and contents insurance falling to £114. The ABI started collecting this data back in 2012.

For combined buildings and content insurance, the average premium was £307, down 2% over the last year, to its lowest level in four years, the research detailed.

With the Consumer Price Index measure of inflation currently at its highest for thirty years, at 7% in March according to the Office for National Statistics, the ABI noted that the insurance cost reductions will give some relief to many households facing rising energy and food bills.

The trade body also highlighted that its tracker is the only survey that looks at the price consumers pay for their cover, rather than the price they are quoted.

Laura Hughes, the ABI’s manager for general insurance, said: “Many households struggling to cope with the cost-of-living crisis, will be reassured that the cost of protecting their home and their possessions has remained competitive, despite the increasing costs of construction materials and labour.

“The recent storms in February, which it is estimated will lead to insurers paying out £500m to affected customers, is a dramatic reminder of the vital financial protection home insurance provides against unexpected and costly events.

Dual pricing ban

Previous research from Consumer Intelligence suggested that the Financial Conduct Authority’s ban on dual pricing, which came into force this January, caused the biggest one-month jump in home and motor insurance premiums in over eight years.

The 9.1% January jump in average premiums for home insurance to £154 was enough to wipe out the previous falls in 2021, Consumer Intelligence calculated.

However Hughes commented: “It is too early to assess the impact of the Financial Conduct Authority’s changes to the rules on pricing of home and motor insurance introduced on 1 January 2022.

“While, as the regulator has said, this could lead to some consumers paying higher prices if they used to benefit from significant new business discounts, for some it could still pay to shop around for the policy that best meets their needs.”

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