Home insurance grows 10pc cheaper
During the quarter the price of combined home buildings and contents insurance policies fell by 3.6%.
The index bases its results on the five cheapest quotes for each customer from direct insurers, brokers and price comparison sites.
Janet Connor, managing director of AA Insurance, said: “Home premiums are most likely to be affected by extremes of weather and the recent winter has on the whole, been notable for its lack of heavy rain, snow, winds and extreme temperatures.
“Nevertheless, climate change is a reality leading to some parts of the world suffering catastrophic weather events over recent months. This should serve as a reminder that the weather can produce unexpected extremes and the UK is not immune.
“Home insurance generally serves home owners well when there is flood or storm damage but the fact is, claims over the past three years have been well within insurers’ capacity and as a result, premiums have fallen.”
In terms of the average five cheapest quotes, the cost of buildings cover currently stands at £112.74, the price of contents is £60.28 and combined policies are £158.66.
Compared to the first quarter of 2014 the cost of premiums is 10.1% cheaper for buildings insurance, 8.2% for contents cover and 9.6% for combined cover.
Connor was surprised by the fall in premiums, but she said the averages hide the fact that people with homes most at risk of flooding will pay more for their insurance.
She added: “The Flood Re insurance scheme, designed to enable those in at-risk homes to obtain affordable insurance cover, will help thousands of families. It will be funded by a levy on insurers which equates to around £10bn every home insurance policy.
“It has however been dogged by tortuous negotiation between the insurance industry and the government and I now don’t expect it to be launched until next year.
“And although we may be experiencing relatively gentle weather conditions now, I hope that whatever form the new government takes after the general election, it will not let flood defence spending or the launch of Flood Re slip down the agenda.”