Home insurance premiums fall for sixth consecutive quarter

Home insurance premiums have continued to fall for a sixth consecutive quarter, with the average combined buildings and contents premium dropping by 6.6% over the 12 months to the end of September.

The AA Shoparound Index update for Q3 2013 revealed the average UK home premium was £172.86 as at 30 September.

Individual buildings insurance was down 5.8% to £129.44 and contents insurance was down 3.8% in the same period to £69.28.

This drop has been attributed to the relatively benign weather, which has meant there has not been an influx of major claims.

But AA Insurance director Simon Douglas said a severe winter would reverse the trend in the short term and also raised concerns that flooding would lead to a sharp spike in premiums.

Douglas added: “Already this month we are seeing some localised extremes of weather causing flooding in places with no previous record of flooding. 

“We are in a competitive market and rate reductions are still being made, but in the longer term, major flooding for example could lead to sharp premium rises, particularly for buildings cover. 

“This is what happened after the 2007 floods. Otherwise, I believe that home premiums will continue to offer good value for money.”