The average price paid for home insurance has fallen to its lowest levels in at least a decade, according to the Association of British Insurers (ABI).
While many other household bills were rising, the average cost of home insurance in 2022 was £300, the least expensive amount since ABI started collecting data in 2012.
The ABI said the home insurance market remained very competitive, despite many homes experiencing weather-related damage last year.
Storms Dudley, Eunice and Franklin led insurers to handle 170,000 property damage claims and pay out £473 million to help affected customers.
An increase in subsidence claims, a rise in payments for frozen pipelines and rising construction material costs and labor costs could put pressure on premiums in 2023, ABI has warned.
Last December’s cold snap led to a surge in claims for damages caused by broken frozen pipes, several insurers have reported.
And record summer temperatures last year prompted several insurers to report or predict a significant increase in subsidence claims, the full costs of which are likely to materialize during 2023, ABI said.
Their home insurance premium tracker looks at the prices people actually pay for their coverage, rather than the quoted prices.
The average annual price paid last year for combined building and contents cover, £300, was down 6% compared to 2021.
The average prices paid for detached buildings (£228) and contents policies (£116) were also the lowest on ABI’s records.
The Financial Conduct Authority (FCA) introduced new rules on the price of home and car insurance on January 1, 2022.
These ensure that the price paid by customers renewing home and auto insurance is no more than the price charged to an equivalent new customer for the equivalent policy purchased through the same distribution channel, such as an insurer, broker, or dealer. price comparison website. .
The rules do not set or limit the level of premium paid by new or existing customers. The price of the coverage will continue to reflect a variety of factors, including the cost of resolving claims, ABI said.
Laura Hughes, ABI’s general insurance manager, said: “Last year was a stark reminder that the only predictable thing about the UK weather is that no one knows what will happen next.
“Insurers are always ready to help customers when the worst happens. Despite the amounts paid out last year and the rising costs of construction materials and labor, home insurers will continue to do everything possible to offer competitive offers to customers.
“Insurers appreciate that these continue to be difficult times for many households dealing with the rising cost of living.
“Anyone who is concerned about being able to continue paying their home insurance premium should talk to their insurer about any alternative payment options that may be available.”