Home insurance prices down despite rising subsidence claims

Home insurance costs have fallen in the past year, despite a rise in subsidence claims following last year's hot, dry summer.

A new analysis by insurance data analytics firm Consumer Intelligence shows that homeowners saw a 1.2% drop in average home insurance premiums in the 12 months to January.

Subsidence usually occurs when the ground beneath a building loses moisture and shrinks. As such, it can increase during prolonged dry spells.

The hot weather of 2018 saw some UK regions experience the driest months on record, particularly in the South East which is also well-known for building on subsidence-prone clay soil, according to the Association of British Insurers (ABI).

Over the months of July, August and September, more than 10,000 households made claims worth a total of £64m to deal with the impact of subsidence -- the highest level of subsidence claims since the record-breaking heatwaves of 2006 and 2003.

Across Britain, the average home insurance premium now stands at £134. The lowest premiums are in the North East, with average prices of £116, while London is the most expensive at £176.

Customers under the age of 50 have seen the biggest drop this year at 1.7%, bringing average premiums to £139. Premiums for the over-50s have seen a slight fall of 0.6%, taking the average to £128.

Properties built before 1895 remain the most expensive to insure, with an average premium of £152, Consumer Intelligence said. However, prices are down by 3.8% on average thanks to renovations of older properties shrinking claim costs.

"While shifts in premiums over the past year have not been huge, it remains a competitive marketplace," commented John Blevins, pricing expert at Consumer Intelligence. "Despite rises in subsidence and escape of water claims, customers have benefited from stable pricing across the board."

Blevins noted that last year's fairly benign winter helped to keep prices down, but looking ahead there could be an impact on premiums from more extreme weather linked to global warming.

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