Record £4.1bn paid out in property claims this year so far – ABI
Flood prevention and resilience must be considered in all planning decisions and building standards, the Association of British Insurers said.
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Your support makes all the difference.Property insurance claim payouts have reached £4.1 billion for the year to date, according to The Association of British Insurers (ABI), the biggest amount for the first nine months of the year since its records started in 2017.
Insurers paid out £1.3 billion in domestic and commercial property insurance claims during the third quarter of this year to help customers cope with events such as fire and flooding.
Claims for the first three-quarters of the year were more than £500 million (15%) higher compared to the same period in 2023.
This increase comes as adverse weather continues to play a significant role in the amount insurers pay out in home insurance claims, the association said.
The average payout per home insurance claim has reached £6,002, a record high, and a third (33%) or £1,506 higher than a year ago, the ABI said.
Flood prevention and resilience measures must be considered in all planning decisions and building standards – to make sure all new buildings are climate resilient
Claims for damage to homes from storms, heavy rain and frozen pipes reached £136 million in the third quarter of this year, according to the data, released at a time when snow has blanketed parts of the UK.
Subsidence payouts for home insurance claims reached £66 million in the third quarter, rising by 11% on the £59 million paid in the second quarter of this year.
The ABI said the average price of a household combined buildings and contents policy in the third quarter of this year was £407, £11 (3%) higher than the previous quarter and £56 (16%) higher than the same period last year.
The average buildings only policy was £329, an increase of £9 (3%) on the previous quarter, and up £57 (21%) on the third quarter of 2023.
For contents-only cover, the average price paid was £138, which was £11 or 9% higher than a year earlier.
The ABI pointed to figures from consultants EY indicating that in 2023, for every £1 property insurers received in home insurance premiums, they paid out £1.18 in claims.
Louise Clark, policy adviser at the ABI said: ”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.
“However, the industry cannot do this alone.”
She added: “Flood prevention and resilience measures must be considered in all planning decisions and building standards – to make sure all new buildings are climate resilient.”