Home premiums soar while motor prices slow

Pearson Ham Group’s latest Premium Price Index for June reveals that home insurance prices have risen on average by 34% compared to 12 months ago, following a 0.7% rise in June, as the average home insurance premium now nears £425. It means that over the past two years, competitive home insurance premiums have now increased by almost 63%.

While insurance premiums continue to rise significantly above the Consumer Price Index rate of 2%, the rate of growth has slowed compared to the first half of 2024, when it peaked at 42% in February 2024.

Stephen Kennedy, director at Pearson Ham, said: “The magnitude of the increase in home insurance premiums is significant. Several factors contribute to this trend, not least the extreme weather events and inflation seen in the last year which continue to affect costs. As these factors continue to impact the market, it is likely that we will see sustained pressure on home insurance prices in the near term.”

In contrast to rising home insurance premiums, the motor market has experienced ongoing reductions in pricing, with a further -1.5% decrease in June. This decline has led to a 12-month price movement levelling out at 12%, compared to its peak of 47% in Q4 2023. Drivers saw a consistent decrease by age in June, with those aged 26 and under experiencing a -1.1% drop in rates, while drivers over 60 saw a larger decrease of -1.8%.

Frances Luery, product manager at Pearson Ham, said: “The reduction in motor insurance premiums is significant and can be attributed to several factors. More importantly, we expect this increased competition among insurers to persist, fostering a much more competitive landscape for drivers.”

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