Residential interest rate hikes “run out of steam” – AA | Latest news

Home insurance rates continued to rise in the third quarter of 2017, according to the latest figures from the AA British Insurance Premium Index.

But the AA said domestic interest rate hikes “were running out of steam” as competition controlled increases.

The average premium for combined buildings and home contents coverage – based on the five cheapest quotes from a national sample – was £ 159.69 in the third quarter of 2017 according to the AA Index.

That’s 3.5% more than the £ 154.36 owners paid in the third quarter of last year and 1.2% more than they paid in the second quarter of 2017.

The AA said the increase was explained by the increase in the tax on insurance premiums to 12% in June.

Michael Lloyd, Director of Insurance at AA, said: “These are very small price changes that reflect the competitive nature of the market and represent very good value for households.

“Premiums have been low for a long time and there is evidence to suggest that they are not keeping pace with changing risks such as potential weather damage and flooding.”

But he added: “If the recent storms are a harbinger of a harsh winter to come, then we can expect homeowners to feel the pain of rising premiums and not just those whose homes have been damaged or damaged. flooded.”

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