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Cost of living boost for millions of households as the average price of home insurance falls to lowest since records began

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  • Average cost of home insurance was £300 in 2022, the cheapest since the ABI started collecting data in 2012.
  • However, a rise in subsidence claims, a surge in frozen pipe payouts and the rising costs of building materials and labour costs could put pressure on premiums in 2023.

Despite a year of turbulent weather in 2022 causing damage to many homes, the average price paid for home insurance fell to its lowest since the ABI started collecting the data back in 2012, as householders got the best deals in a very competitive market according to the ABI’s latest Household Insurance Premium Tracker, published today.  


The ABI’s Tracker is the only survey that looks at the price consumers actually pay for their cover, rather than the price they are quoted.  


According to the latest Tracker, published today: 

  • For 2022, the average price paid for home insurance (combined buildings and contents) was £300 down 6% on 2021. The average price for separate buildings (£228) and contents policies (£116) were also at an all-time low.

2022 - a year of turbulent weather

  • Storms Dudley, Eunice, and Franklin in February led to insurers dealing with 170,000 claims for property damage, paying out £473 million to support affected customers. 
  • The record-breaking summer heatwave temperatures saw several insurers reporting or predicting a significant rise in subsidence claims, the full costs of which are likely to materialise during 2023.
  • The cold snap last December led to a surge in claims for damage caused by burst frozen pipes as reported by several insurers.

The impact of the FCA pricing reforms 

The FCA introduced new rules on the pricing of home and motor insurance on 1 January 2022. These ensure that the price paid by renewing customers for home and motor insurance is no greater than the price charged to an equivalent new customer for the equivalent policy bought through the same distribution channel, such as insurer, broker, or price comparison website.  


However, they do not set or cap the level of premium paid by new or existing customers. The price of cover will continue to reflect a range of factors, including the cost of settling claims. 


In 2022, the average price to renew a combined buildings and contents home insurance policy fell by 10% on the previous year’s average renewal of £316 reflecting, in part, the impact of the reforms.


Laura Hughes, ABI's Manager, General Insurance said:

“Last year was a stark reminder that the only thing predictable about the UK’s weather is that no one knows what it will do next. Insurers are always ready to support customers when the worst happens. Despite the amounts paid out last year, and a rise in the costs of building materials and labour, home insurers will continue to do all they can to offer competitive deals to customers.  


“Insurers appreciate that these continue to be tough times for many households coping with the rising cost of living. Anyone concerned about being able to continue paying their home insurance premium should speak to their insurer about any alternative payment options that may be available.”  


For more information contact  ABI Press Office.

Last updated 15/02/2023