Insurance premiums stall

The annual increases seen for buildings and contents cover have both been below the rate of inflation. The average premium for buildings insurance has risen £1 in the last quarter to £141 – an increase of 0.8%. Despite the fears of increases resulting from flooding, the annual increase for buildings insurance has been 2.3%, adding just £3 to the average premium.

Contents cover has seen the smallest increase with the average premium rising just 0.8% in the last quarter – up 88 pence to almost £114. Over the year, the cost of cover has risen by 2.1%, increasing the average premium by £2.

Even with low increases to average premiums, taking the time to shop around for insurance still pays dividends according to the AA research. Shopping around for comprehensive cover can save 36% or over £252, reducing the premium to £447.

“Seeing increases in insurance premiums so close to the rate of inflation is great news for customers,” said Andrew Briscoe, managing director of AA Insurance Services. “Current industry indications are that this slow down is set to continue and, while premiums are unlikely to fall, customers are now getting a very good deal on their insurance.

“However, customers should still shop around because, as our survey shows, they can save a lot by doing so. We also advise customers to look at what is included in their policies, as the level of cover can differ greatly between insurance companies.”