Home contents insurance costs have fallen to a record low, yet one in four UK households have no cover for their possessions, according to the Association of British Insurers (ABI). The ABI's Home Insurance Premium Tracker shows that the average cost of home contents insurance now stands at a record annual low of £127 a year, or £2.40 a week. That's less than the £4.40 average weekly spend on takeaway meals and is the lowest since the industry group started collecting the data in 2012.
Commenting on the figures, the ABI's senior policy adviser for general insurance, Laura Hughes, said: "While the average cost of home contents insurance is at an all-time low, too many households are still playing Russian roulette with their possessions.
"For some people on lower incomes and renters, especially in cities, insuring your possessions may be seen as unaffordable or unnecessary. But spend a few minutes totting up the value of all your possessions and you'll realise they can add up to a significant sum if they all need to be replaced at once. In a highly competitive market, there are a range of specialist policies available to give you the cover you need at an affordable price."
The ABI's quarterly tracker also reveals that in 2018 the average price paid for buildings insurance, at £258, fell by 8% on 2017 to its lowest level since 2015.
And while the average price paid for combined buildings and contents insurance, at £307, rose slightly -- by just over 1% on the previous year -- it was still the second lowest figure since the trade association started collecting the data in 2012.
Interestingly, separate data also shows a rise in average home insurance payouts.
A pilot project run by the Financial Conduct Authority (FCA) with 31 insurers for the year ended 31 August 2018 shows that average claims payouts for home insurance increased to £3,500 from £3,400 in the prior year.
Claims frequencies went down slightly from 5.3% to 5.0% for home and from 7.1% to 6.1% for home emergency (add-ons), while claims frequencies for home emergency (standalone) increased from 62% to 68% and for key cover from 1.6% to 1.9%.
Claims acceptance rates (how likely claims are to be accepted) remained relatively stable from 2017 to 2018. Almost three quarters of submissions from firms involved in the pilot showed claims acceptance rates above 90%.
To speak to a member of the MasterQuote team today about your home insurance, call us on 02394 003 173.