Annual cost is now £123 as costs rise 3.5% in a year
Londoners pay the highest annual premium at £154 and prices rising fastest in Eastern England at 6.6%
But competition means annual premiums are still 9% lower than February 2014
Home insurance price rises are building up with average premiums climbing 3.5% to £123 in the year to October, new analysis from insurance market research experts Consumer Intelligence shows.
Consumer Intelligence’s data - which is used by the Government’s Office of National Statistics to calculate official inflation statistics – shows the Insurance Premium Tax rise in November 2015 is driving the increases.
However tough competition means the latest tax rise which came into effect on October 1st this year has been largely absorbed, Consumer Intelligence says.
Its quarterly Home Insurance Price Index shows premiums are rising fastest in Eastern England and are up 6.6% in the past year while increasing the least in the South East at 1.8%.
Homeowners in London pay the highest annual premium of £154 which is 36% higher than the lowest of £113 charged in the South West.
Over-50s homeowners pay average premiums of £131 compared to £119 for the under-50s. Prices are also rising faster for the over-50s at 4.1% compared with 3% for the under-50s.
There is some relief for all homeowners however – average best-buy prices are still around 9% lower than in February 2014 with customers benefiting from competition among insurers and lower-than-expected claims for flood and storm damage.
Consumer Intelligence’s research monitors the five most competitive home policies across price comparison websites and direct insurers highlighting the need for homeowners to review their premium at their next renewal.
Laura Crane, Consumer Intelligence client insight executive, said: “The insurance industry is contributing to a growing economic headache with the Insurance Price Index running massively ahead of Consumer Prices Index.
“However, competition for business remains intense resulting in last month’s Insurance Premium Tax rise from 9.5% to 10% largely being absorbed by insurers. Prices are rising everywhere with the over-50s facing the biggest increases and premium increases varying widely around the country.
“Shopping around and haggling with your existing insurer remains important to ensure your premium remains competitive. There are plenty of insurers out there who want to win your business.”