Home insurance premiums climb 6% in past three months

Average buildings and contents policy at £148 is broadly unchanged year-on-year but Consumer Intelligence data shows prices are heading up.

The average cost of home insurance has risen sharply by 6% in the past three months but the latest Consumer Intelligence Home Insurance Price Index ¹  shows prices remain largely flat over a 12-month period. 

Londoners continue to pay the highest insurance premiums at £206 for building and contents policies with the North East the cheapest region paying average premiums of £117. 

“We’re getting a sense that insurers will need to keep pace with inflation as we head further into 2023,” says Georgia Day, Senior Insight Analyst at Consumer Intelligence. 

“The rivalry between the dominant players, as well as the emergence of challenger brands, has kept prices highly competitive in the home insurance market, but we’re beginning to see prices head upwards to meet the demands of inflation,” adds Day. “It also seems the home insurance market is finally following suit with the motor market, which has observed consistently higher prices throughout the whole of 2022.” 

Despite the fall in premiums over six months, average premiums are still up 4.1% over a 12-month period, the independent authoritative source of price movements in the home insurance market shows. 

Long-term view 

Overall, premiums have now risen by 2.7% since Consumer Intelligence first started collecting data in February 2014. 

“Healthy competition in the home insurance market has historically tended to keep prices in check,” says Day.  

Into the regions 

Londoners now pay almost a third more than the UK average to insure their property and contents with only households in the South East and Wales paying more than the UK average of £148 at £159 and £152 respectively. 

Homeowners in London have also seen the biggest annual increases to their premiums at 3.9%. The South East (1.7%), the North East (0.9%) and the East Midlands (0.6%) are the only other regions which recorded annual increases. 

However all regions saw increases in the past three months with London at 7.4% recording the biggest rise followed by the South East on 7.1% and the West Midlands on 6.5% 

 Age differences 

Older householders pay slightly less for their home insurance with the average bill for over-50s at £141 compared with £153 for the under-50s. Price changes in the past 12 months were marginal for both age groups with the over-50s seeing a 0.8% rise and the under-50s a 0.7% fall. 

Property age 

Older properties continue to attract the highest premiums with Victorian-era homes built between 1850 and 1895 seeing average annual bills of £185 for joint home and contents policies. The cost of insuring a property built between 1950 and 1975 by contrast was £141 and homes built since the start of this century cost £142 to insure. 

Prices have dropped by 4.9% in the past 12 months for houses built between 1910 and 1925 while homes built after 2000 have seen premiums rise 1.9%. However all property age groups have experienced premium increases in the past three months with the 1895 to 1910 bracket seeing 7.4% rises and the 1925 to 1940 group experiencing 6.9% rises. 

The Consumer Intelligence Home Insurance Price Index is compiled using real customer quotes from price comparison websites (PCWs) and key direct providers. The data is used by the Office for National Statistics, regulators, and insurance providers as the definitive benchmark of how price is changing for consumers.