Insurers pay out record sums in home insurance claims

Meanwhile, the average cost of a home insurance premium has risen to more than £400.

Home insurers paid out £4.1 billion in claims in the first nine months of 2024, the highest amount on record, according to the latest data from the Association of British Insurers (ABI).

This is an increase of £500 million, or 15%, on the same period in 2023.

Although the total that insurers paid out in claims dipped from £1.4 billion in the second quarter of 2024 to £1.3 billion in the third quarter, the average payout per claim also hit a record high of £6,002.

This is an increase from £5,284 in the second quarter of the year and is 33% higher than one year ago.

Unsurprisingly, the increase in claims payouts is mirrored by an increase in the cost of premiums.

The average price of a premium for combined buildings and contents insurance rose to £407 in the third quarter of 2024, £56 higher than the same period in the previous year.

Similarly, the average cost of a buildings-only policy rose to £329 while the average contents-only policy cost £138.

The impact of bad weather

Storms, flooding and other poor weather conditions are a significant reason why claims payouts, and the cost of a policy, have increased over 2024.

For example, households claimed £136 million in the third quarter of this year for damage from storms, heavy rain and frozen pipes. This is 6% higher than one year ago.

Subsidence also continues to be a major reason for claims as insurers paid out £66 million in Q3 of 2024, 61% more than the same period in 2023.

“Insurers continue to be at the forefront of climate change, supporting communities impacted by extreme weather to recover as quickly as possible,” Louise Clark, Policy Adviser at the ABI, commented.

“We know premiums are putting pressure on household budgets and, as an industry we’re determined to play our part in tackling the cost pressures behind them,” she continued.

Read more: Does home insurance cover storm damage?

Protecting your property

As winter approaches and households brace for colder temperatures, you may be able to minimise the chances of serious damage by spending money on some prevention measures.

“Those worried about floods could buy sandbags and flood boards, and those concerned about fire risks could review their appliances and chargers, but also check their smoke alarms at least once a month,” Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, explained.

You can also prepare your home for winter in some of the following ways:

• Regularly clean gutters, downpipes and drains
• Set your heating to come on if temperatures drop below a certain level to help prevent frozen pipes, particularly if you’re away from your home for several days or more
• Lag, or insulate, water pipes
• Get your boiler regularly serviced
• Do a regular maintenance check of the outside of your property, looking for any loose roof tiles, unstable fence posts and any trees or hazards that could fall and cause damage in strong winds, for example.

If you spot any potential issues, it’s important to address them as soon as possible and call a professional if necessary. By fixing an issue before it becomes more serious, you could prevent further damage and save money on repairs.

It’s also a good idea to read through your home insurance policy so you know exactly what is and isn’t covered before you need to make a claim.

“Unpredictable events can cause distress and costly damage for homeowners and businesses, which is why finding an affordable and comprehensive insurance policy is essential,” Springall pointed out.

“There are ways to reduce monthly premiums without compromising on cover, such as by increasing any excess on the policy, and some consumers could save hundreds by shopping around each year, rather than automatically renewing their plan,” she continued.

Ending this Friday (22 November 2024)