At the same time flooding coverage is maintaining its threat of overwhelming expense.
At the beginning of 2012, the premiums for homeowners insurance across the United Kingdom started to fall, and that trend has continued throughout the last three months, says the latest data released by AA.
The most recent figures have indicated that the coverage is rapidly becoming cheaper to buy.
In fact, the homeowners insurance data released from the period ranging from July through September has shown that the premiums for the coverage fell by almost six percent when compared to the same time the year before. Even contents insurance had fallen by 3.8 percent during that time. When property and contents coverages are combined, there was a drop in 6.6 percent, on average.
Still, homeowners insurance companies caution that it would take only one severe season to change that direction.
According to the director of AA Insurance, Simon Douglas, “I believe that it would take a very severe winter to reverse the downward trend in the short term.” He also went on to add that “We are in a competitive market and rate reductions are still being made but in the longer term, major flooding for example could lead to sharp premium rises, particularly for buildings cover.” Douglas pointed to the floods of 2007 as an example. He did state that it is his feeling that premiums will maintain their ability to provide good value for the amount that is paid.
At the same time, he underscored the fact that homeowners insurance companies remain on edge because of flooding. He spoke of the Flood Re solution and the consultation that led the Government and the Association of British Insurers to arrive at that particular program. It is designed to assist in the protection of the homes that are at the highest flooding risk, and it expired on September 20.
At the same time, the proposed measures for moving forward with flooding protection appear to offer quite the struggle for homeowners insurance companies. Furthermore, there are a number of exclusions that have raised controversy, such as the lack of coverage for any building constructed after 2009, and for small businesses.