The average price of a combined home insurance policy (building and contents) in Ireland increased from €466 during the first quarter of the year to €494 during quarter two equating to an increase of 6%.
News of this unwelcome increase comes from a new quarterly home insurance index launched by AA Insurance which has been tracking a fixed basket of 200 home insurance risks, representative of the Irish home owning population, since the beginning of the year. In total over 1,800 quotes sourced from nine different insurance providers were recorded and analyzed during the first and second wave of the index allowing the AA to calculate the market average premium for both quarters.
“While home insurance premiums have increased since the beginning of the year, homeowners are still getting value for money when you think of it in the context of the two consecutive bad winters we’ve had and the damage they caused to Irish homes.” Believes John Farrell, Director of AA Ireland Insurance.
“Last December alone insurers in Ireland dealt with almost 25,000 claims from private households, the majority relating to burst pipes. Considering the pressure this volume of claims has placed on the industry and concerns about what the coming winter has in store, I would consider last quarter’s increase to be a necessary evil.”
Despite a national increase in premium prices, it’s a more positive story for Dublin homeowners according to the AA Index. In the capital, premium prices averaged out at €13 cheaper than during quarter one, a drop of 2.8%. The average price of a combined policy for a Dublin property during quarter two was €460 down from €473.
The price of a policy outside Dublin however rose to an average of €518 during the second quarter of 2011 up €27 from €491 during quarter one.
The average price of a premium for a property insured for less than €250,000 rose by an average of €35 to €459 during the second quarter of twenty eleven. Premiums for the higher sum insured bracket also showed an average price increase of €21 up to €579.
“With news of a new €100 property tax and increases in the likes of gas tariffs, homeowners will no doubt be looking for ways to tighten their belts.” Says Farrell.
“But we’d urge them not to run the risk of doing without their home insurance especially given the severity of the last two winters. To really put it in context for homeowners the average home insurance claim during December 2010 was close to €7,000.”
Notes to the editor;
About the AA Insurance Premium Index
The AA Ireland Insurance Premium Index, launched in January 2011, aims to track the quarterly movement of home insurance premiums. To facilitate this, we began tracking the market average premium for combined home insurance premiums at the beginning of 2011. The index uses a basket of 200 home insurance risks that is representative of the Irish home owning public. It obtains premium prices against these risks for combined policies (buildings and contents) from a wide range of insurance providers who operate in the Irish market place. The Index tracks a market average premium (average of all quotes received).
Fig. 1 Market average premiums for combined home insurance policies (Based on a basket of 200 risks quoted for by 9 insurance providers):
|Market average premium||February 2011 (Q1)||June 2011 (Q2)||% change|
|Dublin only||€473||€460||– 2.8%|
|Non Dublin||€491||€518||+ 5.5%|
|SI < €250K||€424||€459||+ 8.3%|
|SI > €250K||€558||€579||+ 3.8%|
Fig. 2 Cost of the December 2010 Freeze*
|No. of claims||Cost of claims||Average claim|
*Data sourced from the Irish Insurance federation