Home insurance premiums have slumped dramatically over the past year after being pressed down by the pandemic and the ongoing “pricing battle” on comparison websites, according to new research.
Premiums have fallen to an average of £138, representing an 8.2% decline over the past 12 months, experts at Consumer Intelligence have said.
The pandemic has, however, resulted in price volatility, which is expected to continue in the coming months.
Consumer Intelligence said it found that prolonged periods at home during the start of the year meant people were quick to react to problems at home.
“More people have been staying at home for longer periods – with burglars deterred from breaking into houses and water damage claims down as people are on hand to respond quickly to leaks,” said Harriet Devonald, pricing expert at Consumer Intelligence.
“What we’re also seeing in the home PCW (price comparison website) market is something of a pricing battle, triggered by a few providers – with PCW-led distribution strategies – that have been really trying to grow their home book.
“And this has triggered reactions from some larger players trying to keep up and protect their ground.”
Homeowners under 50 benefited from the lion’s share of the decline in premiums, which were down by 8.9% over the period, while older homeowners only reported a 4.5% decrease.
Although there were continued declines in all regions, there was significant regional variation, with Yorkshire and the Humber witnessing a 10.9% fall.
Wales recorded the smallest decline over the 12 months, as prices only fell by 3.99%.
Ms Devonald added: “We expect new business premiums to go up as the market levels out new business and renewal pricing – however, by how much, we have yet to see.”