According to the ONS, the Consumer Prices Index (CPI) rose by 5.5% in the 12 months to January 2022, up from 5.4% in December 2021. Families are already struggling with food price increases and rising energy bills, and experts predict a further rise in the coming months, meaning more financial pressure on families. Households need to act now to remain financially resilient.
Consumer Intelligence carried out a study revealing that insurance premiums have also been on the rise. Are you affected? How can you reduce costs? Let’s find out.
[top_pitch]
What are the average premiums for home and car insurance?
The average home insurance premium (combined buildings and contents) is currently £154, a 2.9% increase in the 12 months to January 2022. However, older people, especially those over 50, are presently paying £161 on average, a 5.8% increase in the 12 months to January 2022.
The average car insurance premium stands at £705, a 2.8% decrease in the 12 months to January 2022. This might be because of the shift in driving habits due to the Covid-19 pandemic. It could be argued that there might be fewer accidents with more people working from home. However, age does impact the premium you pay. Younger people (aged20-35) and older people (above 75) pay more than those aged 45 to 65 since they’re considered higher risks.
Basically, younger people are considered to be the most reckless drivers, while older people are deemed to have poorer vision and hearing, slower reaction times and an increased tendency for confusion. These characteristics mean they are more likely to get into an accident than other age groups.
Consumer Intelligence did, however, discover that over 50s saw a 2.7% increase in car insurance premium in the 12 months to January 2022, setting the average price at £360.
[middle_pitch]
Why do older people pay higher home insurance premiums?
Older people tend to live in larger and older homes. It goes without saying that a larger home will attract a higher insurance premium. If the home is old, the chances are higher that it might be at risk of structural damage if not properly maintained.
Additionally, older people usually have more valuable items, meaning they require a higher level of contents cover.
What can you do to save money on insurance amid inflation?
As inflation continues to soar in the coming months, we can expect an increase in the cost of motor repairs, car parts, building materials and labour. This will, of course, push car and home insurance prices up further.
The FCA price walking remedy that came into effect on 1 January 2022 protects you from higher renewal prices. However, the secret to saving money on insurance is to always shop around for the best deals, even if you think your existing deal is already good.
The Motley Fool has made work easier for you by sharing a list of top-rated websites that you can use to compare home insurance and car insurance. However, once you find a cheaper deal, ring your existing insurance provider and ask if they can match the better deal before you switch providers. If they can’t, you can think about shifting, but be sure to read and understand the terms of the new policy first.
The post Revealed! Insurance premiums are on the rise. Are you affected? appeared first on The Motley Fool UK.
Is this little-known company the next ‘Monster’ IPO?
Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.
Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.
The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.
But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.
Click here to see how you can get a copy of this report for yourself today
More reading
Used car prices rise even higher, but could a slowdown be looming?
Stock market crash: how I’m preparing for the worst
I’m buying now while the BT share price stays so low
I’d invest £150 a month in a Stocks and Shares ISA for passive income
My top oil penny stock to buy right now
