MoneySupermarket Monitor. Home Insurance. Market data 1st June st May Issue 5

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1 MoneySupermarket Monitor Home Insurance Market data 1st June - 31st May Issue 5 July

2 Contents Executive Summary page 3 Report findings Overall home insurance prices dip The cost of home insurance by location 5 Trends in buildings and contents insurance claims 6 Our valued possessions Which items are we specifying on our insurance policies? The size of our homes and number of people who live in them Contacts 9 The data in this edition of the MoneySupermarket Monitor is representative of quotes run on MoneySupermarket.com from 1st June to 31st May and is based on 3,180,114 quotes run during this period.

3 Executive Summary Welcome to the MoneySupermarket Monitor on home insurance. For more than a year now we have been creating this quarterly publication looking closely at the home insurance industry. It is our opportunity to share the in-depth knowledge MoneySupermarket has of average premiums, claims, contents and possessions insured. The report also includes key figures from data for the average number of bedrooms and residents per home. In this edition of our Monitor, the data are representative of 3,180,114 quotes run on MoneySupermarket from 1st June to 31st May. Julie Fisher Head of Home Insurance, MoneySupermarket Key findings The average overall home insurance premium dropped by 2.4% between and. Standalone buildings insurance rose slightly (1.6%) whereas contents insurance registered a 6.5% drop. Home insurance premiums dropped across 80% of postal regions. However, London bucked this trend with every London postal region registering an increase in premiums of between 3 and 17. Man-made accidents were the cause of more than half (56.7%) of buildings insurance claims in, in contrast to Winter when storm damage wreaked havoc, prompting 56.1% of claims. Some 60.3% of contents insurance claims were the result of man-made accidents. The value of specified items on insurance policies has risen to 2,979, up from 2,963 in Winter -12. Laptops and bicycles remain the most popular items specified, coin collections the most expensive at 6,403 and the single most valuable item on a policy came in at 250,000 for a painting. MoneySupermarket is well placed to give an overview of the whole market, comparing 81 insurance providers in the UK. Comparing insurance prices is really beneficial in helping consumers make the most of their money. Using MoneySupermarket.com can help consumers save on average MoneySupermarket Monitor Issue 5, July

4 Home insurance Overall home insurance prices dip Our latest Monitor reveals that overall home insurance prices have fallen. In, the average premium was compared with in, which represents a 2.4% drop. If we track back further to 2010, we can see that average overall home insurance premiums were In the year under review, overall premiums were at the lowest in February ( ) and at their highest in July ( ). Men versus women In women paid average overall premiums of , down from in. Premiums for men were also lower, with average premiums of in compared to in. Savings continue for combined cover Combined cover is still the preferred method of cover and remains the most cost effective way to protect homes and the possessions within them. Typically, those choosing combined buildings and contents insurance pay around 17.0% less than those with separate policies. The reductions in contents cover outweigh the effect of building insurance rises. In the average policy price is , down 5.6% from in. A small price rise for standalone buildings insurance Our snapshot of the past year shows that standalone buildings insurance has risen by 1.6% with average premiums standing at in compared with in. 200 Contents insurance continues its downward trend While buildings insurance rises, contents insurance continues to move in the opposite direction. Average premiums have dropped by 6.5% over the year that the Monitor covers. In, average premiums were 85.67, compared with in and in Julie Fisher, head of home insurance at MoneySupermarket said: There is still a lot of pressure on household finances and consumers will be glad to hear that home insurance premiums remain excellent value for money. We ve seen a small rise in standalone buildings insurance but overall prices have dipped. Once again, contents insurance premium prices have shrunk, likely driven by increased competition amongst insurers and the introduction of no claims bonuses. Again, this is fantastic for consumers who get peace of mind that their possessions are covered but without having to fork out on hefty premiums. Average overall insurance premiums by month Jun - May Overall premiums by age If we look at the data by age, the Monitor highlights that people in the age bracket paid the highest overall insurance premiums in ( ). Those between the ages of 66 and 75 secured the lowest premiums ( ). While most age groups saw their premiums drop over the year covered by the Monitor, the youngest age group (17-25) saw their premiums rise by 8.3% ( ) to in J J A S O N D J F M A M 1st June - 31st May Based on independent online research by Consumer Intelligence during 1st June 30th June Issue 5, July MoneySupermarket Monitor 4

5 The cost of home insurance by location Premium increases The Monitor shows clearly that Londoners have borne the brunt of home insurance premium rises over the year under review. London postal regions occupy the highest seven spots in our top ten table of home insurance premium increases. The only London postal region that escapes the top ten table is East Central London. West Central London registered the biggest increase, with premiums rising 13.1% ( 17.41) between and. Next up was East London where premiums went up by 10.1% ( 16.20), followed by South West London with premiums increases of 8.5% ( 14.00). Premium decreases The residents of Sunderland saw the biggest decrease in their premiums as they fell by 13.3% ( 20.51). This was followed by York, which registered a 10.7% decrease in premiums ( 15.63). Once again, Harrow is the area where, on average, people pay the highest home insurance premiums. Our data show premiums in Harrow coming in at ( in ). The second-most expensive place is North West London, with premiums of ( in ) and this is followed by Ilford where premiums registered at ( in ). The cheapest average premiums were recorded in Norwich ( ), followed by Hereford ( ) and Dundee ( ). Julie Fisher said: Our latest data show that home insurance premiums have dropped across 80% of the country, which is great news for squeezed consumers. However, Londoners are suffering; our latest Monitor shows that premiums have increased by between 3 and 17 in every London postal region. When we think about what may have impacted London over the last year, the London riots heavily affected some communities. Although many people live in the areas exposed to the riots the resulting number of actual claims made on residential home insurance for riot damage was very small compared to overall claims. Increases could be a result of wider economic factors and reflect the cost of providing insurance in London. The infrastructure improvements as part of the Olympics and the legacy of the games have led to property price increases and therefore, could have potentially added to the cost of cover. Top 10 increases and decreases by postal region - Postal Area % Increase - Increase - London WC % London E % London SW % London W % London NW % London N % London SE % Inverness % 5.93 Isle of Man % 5.19 Paisley % 5.51 Table 1: Top 10 postal areas which saw the biggest increase in the cost of home insurance Postal Area % Decrease - Decrease - Hereford % Southend-on- Sea % Dundee % Wolverhampton % Tonbridge % Telford % Llandrindod Wells % Shrewsbury % York % Sunderland % Table 2: Top 10 postal areas which saw the biggest decrease in the cost of home insurance 5 MoneySupermarket Monitor Issue 5, July

6 Trends in buildings and contents insurance claims Buildings insurance Man-made accidents top the chart In, man-made accidents accounted for Buildings insurance claims by quarter % of buildings insurance claims. This contrasts with our Winter data when man-made accidents accounted for 31.1%. Under the manmade accident heading, escaping water was the most common reason for a claim (accounting for 30.7% of claims), followed by accidental damage (15.6%) and damage caused by drains, tanks and pipes (7.5%). Weather-related claims accounted for 24.2% of overall buildings insurance claims in, with the vast majority (22.9%) the result of storm damage. In Winter -12, following some particularly severe Winter storms, storm damage accounted for 55.2% of claims. Due to the bad weather and increased episodes of flooding over recent months, the number of claims recorded for damage by flood water is likely to increase. Something to keep an eye on in future editions of the Monitor. % Man Made Accidental Summer Man Made Malicious Autumn Quarter Natural Winter Unspecified Weather Related Man-made malicious damage prompted 11.0% of claims, with malicious damage claims accounting for 5.7% and theft 4.9%. Some may be surprised not to see any impact from the Summer riots, but this may be because a lot of the claims were actually made by businesses and not reflected in this data as it refers to residential home insurance only. Contents Man-made accidental damage was once again the overwhelming cause of contents claims in Contents insurance claims by quarter Some 60.3% of claims fell into this category (60.9% in Winter -12) with accidental damage accounting for 48.7% and escaping water 10.4%. Just over a quarter of claims were the result of the man-made malicious act of theft. Julie Fisher commented: The first few months of were fairly tame in terms of weather after the severe Winter storms at the end of and before the onset of the heavy downpours that and Summer will be remembered for. Our data reflects this with weather-related buildings insurance claims dropping to 24.2% in from 56.1% in the Winter of -12. Instead it was manmade accidents that caused the most claims, with escaping water the main culprit. % Man Made Accidental Summer Man Made Malicious Autumn Quarter Natural Winter Unspecified Weather Related Interestingly, while we usually think of contents insurance in terms of protecting our possessions in case of burglary, our Monitor makes it clear that the greatest threat to possessions isn t intruders or even weatherrelated incidents such as flooding. Instead, it s ourselves. Some 60% of contents insurance claims are the result of man-made accidents and if we track the data back over the past year, this is a constant theme. Issue 5, July MoneySupermarket Monitor 6

7 Our valued possessions The upward trend in the value of specified items on our home insurance policies continues according to the latest data gathered for our Monitor. In this figure had reached 2,979, up from 2,963 in Winter -12 and 2,731 the previous. Gender and age differences In, men specified items with a value of 3,228 and women 2,665. If we split the data by age, we can see that the age group lists specified items adding up to 3,727, compared with 3,145 in the age group and 1,569 in the age group. Regional differences Residents in Greater London are registering specified items with a greater value than anywhere else in the UK ( 3,813 in ). Next in line is the South East of England where specified items amount to 3,373. This is in contrast to the North East of England where specified items added up to 2,519 and North Wales where the figure was 2,520. Which items are we specifying on our insurance policies? Our data continues to reveal that laptops and bicycles are the most popular items specified on home insurance policies. In, laptops accounted for 42.5% and bicycles 21.0%. Next up was jewellery, accounting for 19.0%. Possessions quotations by quarter Summer Autumn Antiques 3,413 3,346 3,396 3,325 3,644 Articles of gold 3,337 3,255 3,386 3,630 3,532 Articles of precious metals 3,002 2,988 3,087 3,199 3,605 Articles of silver 3,150 3,237 3,333 3,384 3,190 Audio equipment 2,983 2,967 3,062 3,139 3,172 Bicycle Binoculars 1,908 1,968 1,727 1,954 1,957 Cameras 1,957 1,892 1,997 1,977 1,990 Clocks 3,318 3,173 3,215 3,204 3,951 Coin collection 4,797 5,601 5,705 5,435 6,403 Computer equipment (not laptops) 1,804 1,797 1,823 1,826 1,795 Curios 3,532 3,413 3,345 3,547 3,223 DVD equipment 2,761 3,008 2,653 2,879 2,697 Furs 2,811 2,842 2,718 3,179 2,632 Jewellery 3,144 3,185 3,246 3,307 3,280 Laptop Medal collection 4,420 4,064 4,446 4,448 5,771 Painting/Works of art 4,054 3,943 3,938 4,035 4,270 Photographic equipment 2,332 2,358 2,344 2,344 2,386 Stamp collection 5,886 6,322 6,002 4,957 6,123 Televisions 1,802 1,753 1,799 1,800 1,817 Video equipment 2,747 2,411 2,270 2,503 2,434 Watches 2,957 2,921 3,025 3,075 3,163 Winter Table: Average cost of possessions quotations through MoneySupermarket, compared to 7 MoneySupermarket Monitor Issue 5, July

8 The allure of gold By looking back at our data collected over past years, we can see that specified items of gold on insurance policies have more than doubled from 2010 (0.75%) to (1.52%). However, in spite of the price of gold having risen by 43% over this time period, the value of gold listed on insurance policies has not risen in line. be worth up to around three or four times more now since the value of gold has increased dramatically in recent years. Being underinsured for precious items can cause you extra heartache should you lose them, or have them stolen, and then have to pay out extra money to replace them. been hoarding are worth something. Even the most bizarre collections can sometimes become quite valuable and it s important to have appropriate insurance cover. I recommend taking photographs of your treasured possessions, getting them professionally valued and updating your contents cover as rare pieces of art or memorabilia can rapidly shift in value and you don t want to be caught short if you don t have adequate cover. Julie Fisher commented, One interpretation of the data could be that people now own larger quantities of lower value gold. However, with gold now perceived as a safe haven asset during these challenging economic times, its popularity has led to a sharp rise in its value. It is therefore important people reassess the value of any gold they own and make sure this is reflected in their insurance policies rather than simply rolling over the insured value year after year. For example, a wedding ring or engagement ring bought ten years ago could The most expensive individual items insured When we dig a little deeper into our data, a fascinating range of possessions come to light. The most expensive individual items listed were original paintings by famous UK artist Damien Hurst and another by a prominent Chinese painter, both valued at 250,000. Other items include; a flawless diamond with a listed value of 225,000, a 100,000 Steinway piano and a collection of Elvis Presley Memorabilia with a listed value of 100,000. Slightly more offthe-wall insured items included were gold teeth worth 2,500, a collection of toys reckoned to have a value of 2,000 and a full suit of armour insured for more than 5,000. Julie Fisher said: The message is clear here. If you have a prized possession, make sure you keep on top of its value and ensure this is reflected in your insurance policy. It s also worth doing some investigating to find out if any other items you have The size of our homes and number of people who live in them MoneySupermarket data can also help build a picture of the average size of our homes in the UK and the number of people living in each household. The average home The average home in the UK has three bedrooms according to our Monitor. In Northern Ireland the figure creeps up to 3.2, and in spaceconstrained Greater London, it drops to 2.7 but the data reveal a pretty consistent picture across the country. People per household There are 2.67 people on average living in homes across the UK. East Anglia registers the most people per home with a reported 2.72 in and Mid Scotland the least with 2.55 but again there is little variation in numbers throughout the UK. When it comes to children in our homes, the average is Northern Ireland has the most with 0.79 and Greater London the least with 0.6. Issue 5, July MoneySupermarket Monitor 8

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