A steep rise in home insurance policy costs has been seen in the UK, attributed largely to severe storms and claims for burst pipes, while ABI and Biba call for more effective flood risk management.
In the last quarter of 2023, the average cost of a combined buildings and contents home insurance policy in the UK increased by 19% to £364, up from £305 in the same period the previous year. The Association of British Insurers (ABI) attributed this rise to the severe storms – Babet, Ciaran, and Debi – that led to substantial payouts totalling £352 million to customers for home damage claims.
The ABI has also reported a significant rise in burst pipe claims after a cold snap, exacerbating the upward pressure on insurance premiums. Costs are further driven by the increased prices for raw building materials and labour.
The average premium for home insurance throughout 2023 was recorded at £341, which is a 13% hike compared to the 2022 figure of £302. Louise Clark, an ABI policy adviser, underscored the crucial role of home insurance, particularly in combating extreme weather effects, and urged for more funding into flood risk management systems. The British Insurance Brokers’ Association (Biba) echoed this sentiment, calling for enhanced investment in flood defences to be addressed in the spring Budget.
The UK Government spoke of their dedication to flood protection, mentioning a commitment to a £5.2 billion investment from 2021 to 2027 to strengthen flood defences, with the intention of shielding properties, agricultural land, and businesses from the perils of severe weather and flooding.
