- But it is essential customers in flood-risk areas shop around, Consumer Intelligence advises
- Homeowners with existing policies could benefit from cancelling
More than 1,000 homeowners a day will benefit from the launch of insurance scheme Flood Re designed to cut the cost of cover for homes in flood risk areas, insurance market research experts Consumer Intelligence estimate.
But people in flood-risk areas need to shop around as new terms and conditions will not be in their existing policy.
And in some cases it may be worth cancelling their existing policy to take advantage of potential savings.
Its analysis1 shows the gap between the most competitive home insurance policies and the average is about £80 a year with the lowest annual premium at around £118 compared to £198 for the market average.
Prices across the whole market for the top five most competitive quotes are around £131 a year highlighting the benefits of shopping around on price comparison websites.
Flood Re, funded by a levy on insurers, launches today and will help up to 200,000 households in flood risk areas who struggle to afford home insurance. Its website http://www.floodre.co.uk/ will list companies taking part.
Ian Hughes, Chief Executive of Consumer Intelligence said:
“Flood Re brings real benefits for customers. For some it will be a better price for their insurance or a lower excess while others will finally be able to get cover.
“It is essential that people shop around. Anyone currently renewing in a flood area needs to take action as they won’t benefit from new prices because before today all quotes had to be given on the old basis.
“For some it might be worth cancelling their policy midway because the benefits from Flood Re will outlay their costs.”
Average home insurance costs have been increasing for the past three months as the Insurance Premium Tax rise from 6% to 9.5% in November comes into effect and another rise to 10% will take effect from October.
The £690 million raised from the latest tax rise – announced in last month’s Budget – will be used to strengthen flood defences.
Insurers are currently paying out around £1.4 billion in flood and storm damage as a result of the winter flooding in the north of England and Scotland earlier this year.
Notes to Editors
1The cheapest premiums were calculated by comparing the prices offered for 2,100 people by all the major Price Comparison Sites and key direct insurers. The top 5 prices for each person were compared to the previous month’s top five and then averaged to produce the index.
About Consumer Intelligence
Consumer Intelligence conducts consumer surveys and benchmarks price and service performance providing unique insights into competitor pricing and customer experiences, their attitudes, opinions and behaviours. For more information, visit the web site www.consumerintelligence.com