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Cost of home insurance rises

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  • 15/10/2010
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The average cost of UK home insurance premiums has increased considerably over the past year as insurers price in climate change.

According to the British Insurance Premium Index compiled by the AA, a typical buildings insurance policy increased in price by 7.5% between September 2009 and 2010, to £133.

The typical cost of contents insurance rose by 14.9% over the same period, to an average of £73.

The cost of a combined buildings and contents policy rose by 6.7% over the year to £194.

Simon Douglas, director of AA Insurance, pointed out that after many years in which the cost of home contents insurance had barely changed, the last two years have seen more significant increases.

“I believe this reflects growing concern amongst insurers about the effects of climate change and the risk of flooding that many UK households face.

“With the Government spending review about to take place, I’m particularly concerned that investment in flood defences is not affected,” he added.

“The AA has called on the Government to keep its commitment to investment in flood defences reduce the risk of future major floods like those at Cockermouth and Tewkesbury. If spending on flood defences is reduced, it puts thousands of homes at risk of being unable to insure their homes or obtain mortgages.”

He added that insurers are dealing with an increasing number of properties damaged by extreme weather and flash floods, often in places that have no previous history of flooding.

“Violent weather is likely to become more frequent in future and insurers must prepare for it and inevitably, insurance premiums will rise.”

 

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