Beast from the East pushes up home premiums

The Beast from the East is still hitting home insurance customers as premiums rise three times faster than inflation.

Freezing weather in February and March along with increased claims for water damage have pushed home insurance premiums up to an average of £133: a rise of 7.6% compared last year, according to research from Consumer Intelligence.

The cost of claims from the freezing weather in February and March plus the impact of Storm Emma have pushed average prices higher despite increased competition from providers.

Londoners are paying the highest average premiums at £172 a year and prices are rising fastest at 11.9%. The lowest prices are paid in the North East at £120 while Scots are experiencing the lowest average price rises at just 3.9% in line with inflation at 2.4%.

There is some relief for home insurance customers however - prices are still slightly lower than in February 2014 when Consumer Intelligence started publishing data.

Homeowners with properties built before 1910 are seeing annual increases of 10.1% but new homes built after 2000 are also suffering with prices up 9.6% in the year to April. Older homes tend to have more wear and tear and thus  are more likely to have things go wrong. Matching existing building materials for repairs in older properties can be more expensive.

While premiums are sharply higher than a year ago, but have shown some decline in the past three months. The biggest regional drop in prices in the past three months was 2.2% in Wales. People aged under 50 are seeing prices rise at 8.8% compared with 5.9% for the over-50s.

John Blevins, Consumer Intelligence pricing expert said: “All the major insurers have seen a rise in claims from the Beast from the East and extreme weather with the cost of claims feeding through to premiums. 

“The ongoing issue of increased escape of water claims as demand for wet rooms and extra bathrooms rises is also adding to the pressure on prices despite competition on premiums from insurers.

“The growth of insurtech and smart homes able to detect issues before they become a claim will help cut premiums in the future, but as yet not enough customers and insurers are adopting new solutions.”