Home Insurance Premiums Fall Thanks to Lockdowns

According to a new report by data analysts Consumer Intelligence, home insurance premiums have fallen by 1.2% over the last year thanks to UK lockdowns.

With millions of people forced to stay home amid the ongoing pandemic, the number of claims for damages has fallen, driving down premiums.

No doubt, the current pandemic and resulting lockdown is responsible for these shifts, given there is a reduction in overall claims being made, With any insurance, claims frequency and severity will dictate pricing movements, and as the world shifts to slowly reducing Covid-19 restrictions, we will expect to see small shifts in pricing as a result.

said John Blevins, head of product at Consumer Intelligence.

The fall in premiums comes despite an uptick in accidental damage claims. Blevins pointed to people spending more time around the home compared to the same period in 2020, just before the first lockdown was announced, as the probable source of the rise in this type of claim.

In December, online comparison site HelloSafe found that overall, home insurers saved some £368m last year due to lockdowns.

Insurance expert and CEO at HelloSafe, Anthony Fruchard, said:

It is not a surprise to see that home insurance claims have decreased in a significant way over 2020, with many Britons stuck at home during a year when restrictive measures were taken to stop the Covid-19 pandemic.

The company found that would-be burglars put off by stay-at-home orders led to a 13% decrease in the number of burglary claims, saving £47.6 million on this type of claim alone.

However, the industry's savings are not felt equally by everyone, with differences in the average premium cost across the country and age groups.

The under the 50s have saved the most over the past year, with the average cost of a policy falling by 2.1% for homeowners in this age group.

Despite this, they still pay more than the over-50s- for whom an annual policy costs an average of just £123, versus £153 for younger homeowners.

Perhaps unsurprisingly, London is the most expensive place to buy a home insurance policy.

Londoners pay an average of £215 for a typical policy. This is more than 50% of the national average, which includes London!

This means in reality, Londoners are likely paying even more than 50% extra compared to homeowners in other parts of the UK.

Meanwhile, homeowners in the North East (£129), Midlands (£132) and South West (£130) pay less on average than the rest of the country.

The kind of property also has an impact on how much homeowners must pay to protect their house.

It's bad news if you're a fan of the sliding sash windows and iron railings typical of Victorian architecture: homes built between 1859-1895 are the most expensive to insure, clocking in at an average of £174 per year.

By comparison, new builds (post-2000) are the cheapest to insure, averaging just £131 per year.