Home and car insurance premiums are rising, largely as a result of the damage and subsequent insurance claims of the flash flooding this summer, bringing an end to the falling trend in home insurance premiums, reveals the AA’s latest British Insurance Premium Index.
The cost of car insurance
has been growing since the second quarter of 2006, and the report found that the premiums show no signs of slowing down at the present time.
Over the past quarter, the index shows that the average quoted premium for home buildings insurance has grown by three per cent – more than at any other time since 1994 when the index was launched – and contents insurance went up by more than two per cent.
Comprehensive car insurance policies rose by more than one per cent, while the average premium for third party, fire and theft rose by 3.5 per cent.
The AA Index shows that six months of weather-related claims have had an adverse affect on the cost of insurance, with the damage caused in the month of July alone amounting to an estimated £3 billion bill for the insurance industry.
John Close, Insurer Relations Director at AA Insurance, said: “We now see the result of that devastation reflected in premiums as insurers meet the cost of drying out and repairing homes as well as temporary re-housing of families while their homes were made habitable once again.
“Some predictions that premiums would rise by 15 per cent were overly pessimistic and, although I believe premiums will continue to rise as insurers dip into their reserves, I expect competitive pressure will keep increases affordable. One positive outcome seems to be that those who had no contents insurance are thinking again, with many insurers reporting increasing business.”
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