Home buildings insurance hits record high
Monday, 24 January 2011 11:42 AM
Home insurance premiums continued to rise in the final three months of 2010, with the average cost of a buildings policy increasing by more than ten per cent across the year as a whole.
According to the AA's latest British Insurance Premium Index, typical residential buildings cover went up in price by £10, or 7.7 per cent, over the fourth quarter of last year, to £143 – its highest ever level.
The increase saw premiums soaring by an average of 10.2 per cent across the full 12 months, though the cost of contents cover came down slightly, to £72.
Simon Douglas, director of AA Insurance, commented: "There has been no let-up in premium increases as insurers struggle against losses from 2009, when for every £100 taken in premiums, £123 was being paid out in claims.
"This has led to the biggest annual premium increases we have seen since the AA Index began in 1994," he added.
Douglas went on to say that insurers were beginning to build reserves to help them meet weather-related claims in the future.
"Flood claims are both increasing in number and unpredictability. In just the past quarter we have seen severe weather in Cornwall, Hampshire, Sussex, the Isle of Wight and elsewhere, in places where there is no flooding history," he explained.
"In addition, the early winter brought a huge increase of snow and ice-related claims for the second year running – in fact the Association of British Insurers estimates that the industry is paying out £7 million per day for burst pipe claims."
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