It’s probable that households who just renewed their auto or home insurance were taken aback by the significant hike in monthly prices.
However, given that inflation has more than halved, why are insurance prices still rising?
According to data analytics business Consumer Intelligence, the most frequently quoted price for annual home insurance was between £150 and £199.
The average reported price of home insurance increased by 41.6% in the 12 months leading up to April.
This year’s increase is the most since Consumer Intelligence started monitoring house insurance costs in 2014.
With house insurance rates rising by 49.9% from the previous year, homeowners in London had the biggest increase in April.
The East and South East of England, where quotes increased by 41.9% and 45.8%, respectively, were closely behind them. In total, since February 2014, quoted premiums have increased by 68.8%.
“Over the past 12 months, inflation has been observed in the market.
” Matthew McMaster, senior insight analyst at Consumer Intelligence, stated that the past three months had seen the greatest percentage in the past ten years, surpassing the 10% observed in Q3 2023.
Clients with a history of building insurance claims were given average quotes that were 50.3% more expensive than the prior year.
The increase for those who had not filed a claim was somewhat less, at 40.9%.
19% annual jump in average home insurance premiums
According to data from the Association of British Insurers (ABI), the average price of home insurance increased by 19%, or £60, each year in the first quarter of 2024 when considering prices paid rather than bids.
The average cost for home insurance, which includes both buildings and contents coverage, increased to £375 in the first quarter of 2023 from £315.
Although rises in insurance premiums have historically seemed to track inflation, they have recently increased by a significant amount more than the average stated rates of inflation.
October 2022 saw the UK’s inflation reach a 41-year high, climbing to 11.1% due to increased energy and food prices.
According to data from the Office for National Statistics (ONS), it has since decreased to 2.3% in March, the lowest level in almost three years.
Drivers hit with 25% increase in premiums
In 2023, drivers’ premiums for auto insurance skyrocketed by 25% over the previous year, prompting the ABI to unveil an action plan aimed at curbing expenses. The average amount paid by drivers increased to £543 in 2023 from £434 in 2022.
According to ABI data, the average premium increased from £562 to £627 in the final three months of 2023, a 12% increase over the same period the previous year. Premiums increased by 1% to £635 for the first quarter of the year.