We’ve warned before about the dangers of just going for the cheapest home insurance you can find. Recent news about the rising cost of home insurance means it’s a good time to issue this warning again.
According to Consumer Intelligence, whose data is used by the Office for National Statistics, home insurance premiums are rising at the fastest rate for three years. The key reason for this is the increase in Insurance Premium Tax (IPT) from 10 per cent to 12 per cent, which took effect at the beginning of June.
But according to Consumer Intelligence, there are other contributory factors including the uncertainty around the current Brexit negotiations. This has led to a weaker pound, making imported materials more expensive. This is having a knock-on effect on the cost of home repairs and, as a result, insurers are increasing premiums to cover this risk.
A number of other factors are having an impact, including more people having extensions built. This is apparently increasing the number of claims for leaks in new bathrooms.
The good news is that, although it’s the fastest rise for some time in the cost of premiums, the average home insurance cost is lower than in February 2014. But this might change if this rate of increase continues.
As a result, many people will be looking for the cheapest home insurance cover. But as always we would advise against just judging on price as this may leave you exposed if you need to make a claim. The most important thing is that the home insurance you buy really does provide the cover you need, so it’s a question of deciding whether it’s worth paying a little bit more for peace of mind. Read the small print on the policy and make sure it will provide exactly what you need if the worst should happen.