Modest rise in home insurance price

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The cost of home insurance premiums increased by 1.8 per cent in the first quarter of the year, figures have revealed. While the average price of contents policies fell by 2.6 per cent, combined packages went up by 3.4 per cent, the British Insurance Premium Index claimed.

The news continued the modest upward trend witnessed over the last year, as well as sparking claims that "buy one get one free" offers were drying up.

Simon Douglas, director of AA Insurance, said: "There have been several damaging weather events over the past year - from golf ball-sized hailstones to tornadoes and, over the winter, damage from ice and snow.

"Severe damage from storms or floods means extensive and expensive repairs to buildings, while the work must also meet current building regulations on, for example, re-wiring or insulation.

"However, the contents insurance market remains very fluid. Confounding predictions that steadily increasing frequency and cost of claims would lead to premium increases, costs have remained relatively static. A small rise over the previous quarter has been almost cancelled out and the average quoted premium is only 5 per cent higher than when the index started, back in 1994."

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