Homeowners Contemplate Dropping Insurance Coverage Amid Growing Financial Pressure

• 14% of individuals are considering canceling their contents insurance as they are now primarily at home.
• 11% are contemplating reducing or canceling their policy due to financial constraints.


The most recent study from data insight specialist Consumer Intelligence reveals that the cost of buildings and contents insurance has increased by 0.5% in the last three months, reaching an average premium of £151. Despite this slight rise, prices have only gone up by 2.3% over the past six years. However, research shows that 14% of homeowners are thinking about canceling their contents insurance because they are now spending more time at home, while 11% are looking to reduce or cancel their policy due to financial difficulties.

Unlike the car insurance sector, where fewer vehicles are on the road resulting in fewer claims, more people are staying at home. The UK’s Office for National Statistics reports that 49.2% of employed adults are now working from home. Additionally, six million British workers have been furloughed. John Blevins, a pricing expert at Consumer Intelligence, believes that the pandemic will not only change our way of life but also our interaction with insurance policies. He anticipates that this change in behavior will impact claims in the home insurance market.

The priciest postcodes for home insurance are still in London and the South East, with average premiums of £205 and £157 respectively. The North East remains the most affordable region, with an average premium of £133. Older properties, especially those built over a century ago, continue to have the highest insurance premiums. Victorian-era properties built between 1850-1895 have the highest premiums at £184, followed by properties constructed between 1925 and 1940 at £165.

Blevins emphasizes the importance of claims in pricing movements and highlights that older properties with aging pipes are more likely to cause water damage claims. Newer properties, on the other hand, have more wet rooms, increasing the chances of something going wrong. The data presented in the Home Insurance Price Index can help in optimizing pricing strategies and understanding market movements.