Home insurance costs soar in the wake of premium tax rises
Thursday, 5 July 2018 () The price of home insurance has jumped more than 20 per cent in the last two years, according to figures out today.
The research, carried out by price comparison website Compare the Market, found that the average cost for buildings and contents insurance jumped to £161 in the last year, rising 21 per cent from £133 back in April 2016.
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Hikes to insurance premium tax (IPT)and the introduction of a government-backed reinsurance scheme that means "insurers need to increase premiums across the country to subsidise the at-risk homes" were cited by Compare the Market as the driving forces behind the growing cost of home insurance.
IPT rates have climbed from six per cent to 12 per cent in the last three years.
The cheapest household premiums on offer in the UK has also shot up, increasing on average to £141 from £118 in April 2016.
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Chris King, Head of Home Insurance at Compare the Market, said: "With recent research finding that over five million UK households do not have home insurance, the continued rise in the cost of home cover will be a blow to the millions that can’t afford it."
King added: "Home insurance should be considered essential to every household – but if premiums keep rising, more and more people will be priced out of the market. However, there is hope for those struggling with the cost of a home insurance policy. By switching provider, the average person can cut around 12 per cent of their premium overnight."