Home insurance price increase of 50%. Any ideas why?

Wealthjd

Hi! 

I have just had my 2023 home insurance renewal through and it has gone up by 50%. Having a look around, the indication is that in general home insurance has reduced slightly, however this is not the case for mine. 

I have shopped around and the prices are all around the same figure as my renewal, so something has happened to increase these prices.

I called my current insurer to ask why, and they said that there is nothing on my file indicating why it would have gone up. No changes to the flood risk, or subsidence and I have made no claims with everything being the same as last year.

I have requested a subject access request for all my information, so this may give some clue as to why it has gone up.

Does anyone have an idea why it may have increase by so much?

Thanks!

John

MattMattMattUK

Small crime wave in your area perhaps? A few years before Covid a friend's insurance went up significantly, it was related to a dramatic increase of break ins on the new build estate he lived on. 

Jaybee_16

My building and contents insurance was due last month. The renewal had increased by 34% so shopped around and most were around the same amount. 

I never phone the insurer as those in the call centre are unlikely to know why the premium has increased. Found another insurer £100 cheaper so called existing insurer to cancel. Their response? Oh, OK. 

user1977

Wealthjd said:

I have requested a subject access request for all my information, so this may give some clue as to why it has gone up.

It won't if you've already been told there's nothing relevant on your file. A SAR is only going to reveal personal stuff about you, not the other factors which go into how they calculate the premium.

If everyone else is quoting similar prices (and they won't know anything about you beyond what you put on the proposal forms) then that's the current market rate.

DullGreyGuy

Wealthjd said:
Having a look around, the indication is that in general home insurance has reduced slightly, however this is not the case for mine. 

Premiums fell in 2022 but all predictions I've seen were for notable increases in 2023 due to the combination of high inflation particularly hitting building costs and  weather (the hot weather over summer spiking the highly expensive subsidence claims from clay drying out and there was a winter spike in freezing pipes). EY predicted an average 30% increase for Home in 2023 

dunstonh

I have just had my 2023 home insurance renewal through and it has gone up by 50%. Having a look around, the indication is that in general home insurance has reduced slightly, however this is not the case for mine. 

In general, home insurance is not cheaper this year. It is more expensive.

Does anyone have an idea why it may have increase by so much?

If you change insurance every year or every few years, then you no longer benefit from early year discounting.   So, your current insurer would have to remove that discount.

In most cases, increases are just above inflation (as building costs have increased above the headline rate due to material shortages and builder shortages) but in most cases it is the loss of early year discounting that is the major difference.

I have requested a subject access request for all my information, so this may give some clue as to why it has gone up.

It wont give you a clue as insurance is not priced for you individually.  It is bulk priced and there is commercially sensitive information and you are not required to be told about it and it will not appear on your files.

Stompa

My quote this year was ~30% up on last year. By switching to a different company I managed to get it down to around 10% less than last year.

TELLIT01

Really just thinking out loud, but could one of the reasons for the increase be the insurers expecting properties to be unoccupied more now as Covid restrictions are gone.  More people going away on holiday?

user1977

TELLIT01 said:

Really just thinking out loud, but could one of the reasons for the increase be the insurers expecting properties to be unoccupied more now as Covid restrictions are gone.  More people going away on holiday?

Or just being unoccupied during the day.

But in any event I think there's lots of inflation on the costs of contractors etc for whatever works are being paid for.

Wealthjd

Thanks for all your replies, all interesting points. From comparing other providers they are all about the same price, so all have increased by around 50% from last year.

I think that if is due to crime in the area, surely that they should be able to tell me this? I think that it’s really unfair that I cannot know why premiums are at the level they are. Surely there should be more transparency in this for the end consumer? If everyone is using the same data then it wouldn’t be commercially sensitive? It would be up to them as to how they then assess it, which would be commercial, but that’s not what I have asked them.

If the price rise is indeed for frozen water pipes and hot summer resulting in more subsidence, then if this year is a more normal year, then would premiums fall by over 30% to get back to the previous premium before the 50% increase? I highly doubt it!

dunstonh

Thanks for all your replies, all interesting points. From comparing other providers they are all about the same price, so all have increased by around 50% from last year.

No.    
Those that operated early year discounting have increased by around that much.   Those that didnt have increaesd by as much.

 I think that it’s really unfair that I cannot know why premiums are at the level they are.

Ask your broker.

Surely there should be more transparency in this for the end consumer?

There is and your broker/adviser would have the answer.   However, if you are bypassing them, then its for you to find out.

 If everyone is using the same data then it wouldn’t be commercially sensitive? 

They are not using the same data.    Whilst a lot of products are white labelled or versions of similar policies from the same group but under a different name, each main source uses their own data.

If the price rise is indeed for frozen water pipes and hot summer resulting in more subsidence, then if this year is a more normal year, then would premiums fall by over 30% to get back to the previous premium before the 50% increase? I highly doubt it!

In addition to the banning of early year discounting, 2022 was a drought year and subsidence and movement claims were massively higher than normal.

Premiums are unlikely to fall back as inflation is still running high and many as early year discounting has been banned, no provider is able to return to that model.