UK home insurance premiums rise following severe winter storms

Home insurance premiums in the UK have increased by 3% in the first quarter of 2024, following a winter marked by significant weather damage, according to data from the Association of British Insurers (ABI).

The rise sees combined buildings and contents insurance reaching an average premium of £375. While buildings-only cover rose by 5% to £298, contents-only cover remained steady at £132.

This increase is slightly lower than the 4% rise observed in the fourth quarter of 2023. However, looking at the year-on-year comparison from the first quarter of 2023 to the first quarter of 2024, premiums have surged by 19%.

Despite this sharp increase, current prices remain below the peak of £419 recorded in the first quarter of 2016.

The year 2023 saw the highest weather-related home insurance claims ever recorded, totaling £573m. This was largely due to damage from the succession of storms Babet, Ciaran, and Debi, which struck in the last quarter of the year and resulted in £352m in damages to homes. Flooding continues to be the most significant cause of weather-related damage.

Louise Clark, ABI’s policy adviser for general insurance, emphasised the need for greater investment in flood defenses to mitigate these costs. “The longer we put off vital investment in flood defenses, the more that flood damage will ultimately cost the consumer,” Clark said.

She highlighted that while the Insurance Premium Tax (IPT) was increased in 2016 to fund flood defenses, actual investment in flood prevention has consistently fallen short of the ABI’s recommended £1bn a year.

Clark also called for reforms in planning laws to avoid building homes in high flood risk areas and for a focus on developing climate-resilient properties.