According to the AA British Insurance Premium Index report published last week, home insurance policies increased by 11% in 2011.
Different factors in 2011 have influenced the increase in home insurance premiums with a high level of severe weather and flooding claims in parts of the UK.
The findings showed that in the last quarter of the year the cost of a buildings insurance premiums rose by 3.1% with a premium costing on average £157, this resulted in a 9.5% annual increase. Contents insurance premiums rose by 4.4% between October and the end of the year resulting in an average premium of £80.
Combined buildings and contents insurance also rose by 5.6% costing around £211 for an average policy. The findings highlight that it could potentially be cheaper for homeowners to have combined insurance than buying them separately.
Insurance claims for 2011 resulted in over £650 million being claimed by homeowners as a result of damage caused to homes during the months when the UK suffered from its most severe weather.
To minimise the amount of claims that insurance companies received in 2011, weather warnings were given out by the Met Office urging people to be extra vigilant. Information about how to protect homes from severe storms and flooding were released by the Association of British Insurers. We published details from this in an article about how to prepare your home for severe weather.
Along with severe weather another factor affecting the cost of home insurance premiums is the increase in theft claims. According to a British Crime Survey, burglaries in England and Wales grew by 10% over the 12 months to the end of June 2011.
As the findings show home insurance premiums increased over the course of 2011 and it is predicted they will continue to increase during 2012 by 5% to 10%.
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By Amanda Bainbridge