Insurers paid out £1.4bn in claims during the second quarter of this year, according to the Association of British Insurers (ABI).
The latest data from the trade body said the record payouts helped homeowners and businesses cope with unexpected and unwanted events like fire and flooding.
This is a quarterly high since the ABI started collecting the data in 2017 – and a 5% increase on the first quarter of the year, when payouts hit £1.3bn.
The ABI also found that the average payout per home insurance claim was up, rising 16% on the previous quarter to £5,284.
Adverse weather claims
Adverse weather continues to play a significant role in the amount insurers pay out in home insurance claims, said the ABI.
It revealed that claims for damage to homes from storms, heavy rain and frozen pipes reached £144m in the second quarter of this year. This is the fifth consecutive quarter that weather-related claims have been above £100m.
Claims for weather damage to businesses also remained high, at £81m.
Impact on premiums
In the same period, the average price of home insurance rose to £396, up £21 (6%) on the previous quarter and 19% compared to the same period last year.
The average buildings-only policy was £321, up £23 (7%) from the previous quarter. For contents-only cover, the average price paid was £137, which was up £5 (4%) compared to Q1.
Louise Clark, policy adviser at the ABI, said: “Home insurance continues to play a vital role in supporting customers when the worst happens. Despite rising cost pressures, insurers remain committed to doing everything they can to offer competitively priced cover and help their customers during a claim.
“Our latest figures demonstrate the devastating impact that adverse weather can have on people and their homes. That’s why it’s important that the Government takes the opportunity to reform the planning system, to focus on prevention and resilience measures to help reduce our nation’s vulnerability to the effects of climate change.
“Urgent Government action to tackle surface water flooding and maintain flood investments and maintenance will also help reduce the future impact of flooding.”
Nathan Blackler, home insurance expert at GoCompare home insurance, added:
“These latest figures from the ABI won’t be welcome news for homeowners.
“Home insurance premiums have escalated in recent years for a number of reasons, including inflation and the rising cost of materials and labour – but it’s the increase in adverse weather-related claims that have had the most significant impact on the cost of insurance.
“Despite external factors such as this, there is also a wide range of factors that will affect the cost of your home insurance premiums, from the size of your property to the area where you live, all of which can impact how much you are likely to pay for your insurance, which is why it’s always so important to shop around when your policy is up for renewal, so you’re getting the best product and price for your circumstances.”
This article was first published on YourMoney.com‘s sister site, Your Mortgage. Read: Property insurance payouts rocket to record-high level