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Lockdown cuts home insurance costs as claims fall – study

A steep drop in recorded crime since the start of the coronavirus lockdown has led to a downward shift in home insurance premiums, with the average buildings and contents policy falling to 0.3% in the last three months.

“It’s perhaps no coincidence that this period takes us through the recent lockdown where the vast majority of people were spending much more time at home,” says John Blevins, product manager at Consumer Intelligence.

“Crime rates and home claims have both declined in recent months, which is the most likely reason for this small deflation in premiums.”

Despite this, the analysis shows that average premiums are up 3% over a 12-month period, with a typical buildings and contents policy now standing at £150.

Overall, premiums have risen just 1.9% in the six-and-a-half years since the insurance research experts first began collecting data. Although premiums edged up to its record point in June – before falling back again in July – prices have remained broadly stable for the last three years.

Homeowners in London (£195) and the South East (£160) continue to pay the most for their insurance policies – the only two UK regions to attract premiums that are higher than the national average.

The East Midlands (£136) and the South West (£136) are now the cheapest areas for home insurance.

When looking at age groups, premiums for the under-50s have remained flat in the last three months, while annual policies for over-50s have become 0.9% cheaper over the same period.

Interwar properties – those built between 1925 and 1940 – saw premiums rise 4.4% in the last 12 months, the most by any segment. This was closely followed by houses erected this millennium (4%).

The table below shows average premiums and price rises around Great Britain:

REGION

CHANGE IN YEAR TO JULY

AVERAGE PREMIUM (5 CHEAPEST)

London

7.4%

£195

Scotland

3.8%

£147

South East

3.7%

£160

South West

3.1%

£136

West Midlands

3.0%

£143

Eastern

2.4%

£143

East Midlands

2.2%

£136

North West

1.6%

£148

Yorkshire and The Humber

1.6%

£147

North East

1.0%

£141

Wales

0.6%

£145

GREAT BRITAIN

3.0%

£150

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