The Association of British Insurers (ABI) have announced that home owners paid a reduced amount for their buildings and contents insurance in 2014.
The figures revealed that premiums for building insurance dropped by 6% to an average of £230 per annum. Further to this, the average price paid on contents insurance decreased by 5%, landing at an average of £124 for the year.
The average yearly premium on combined buildings and contents insurance reached £291, which works out at £5.60 each week. This meant it was down the previous quarter by 1% and had decreased 3% for the entire year.
Malcom Tarling, a representative for the ABI, emphasized the fact that these figures referred to averages. He stated: ìSome peopleís premiums will have gone up, especially if they are in an area of flood risk. But premiums will also vary from company to company depending on whether they have experienced more or fewer claims than they were expecting.î
The Association of British Insurers said that competition was behind the reason for this reduction. This is despite the fact that there was severe flooding in areas of Britain last winter, specifically within Somerset, and in West London where properties were situated close to River Thames.
The insurance industry predicted having to pay out £451 million due to claims on the contracts they provide.
The manager for ABIís General Insurance, Mark Shepherd, used this opportunity to highlight the importance of home insurance. He stated: ìThere is no substitute for home insurance. Last winterís floods dramatically highlighted the value of insurance, with insurers dealing with over 13,000 claims from flooded property owners.î
He went on to say that ìthe average domestic theft claim of £1,600, and average cost of dealing with subsidence running at £6,900, home insurance is outstanding value for money.î
He also praised the ìexpertise of insurers in assessing, planning and pricing for unwelcome events such as bad weather, ensuring that millions of families are benefiting from very competitively priced home insurance that is protecting them from many of lifeís unexpected and unwelcome events.î
With the increase in destructive and unpredictable weather in recent years, this reduction in price for insurance will come as extremely welcome news to many home owners.