Home contents insurance rise explained

An insurance expert has calmed fears over the recent rise in contents insurance premiums, insisting they still represent good value.

The latest AA British Insurance Premium Index shows that contents insurance premiums went up by 6.4 per cent between October and January. The report also revealed that combined buildings and contents cover had gone up by eight per cent.

However, Simon Douglas, director of AA Insurance, has pointed out that the contents premiums have only risen by 8.1 per cent since July 1994, with a 7.7 per cent rise coming over the last 12 months alone.

He said: Average premiums for contents cover have remained low thanks to heavy discounting, despite increasing cost and frequency of claims during the recession. I think we are seeing the industry correcting this anomaly.

The Association of British Insurers recently revealed that 22 per cent of people had cancelled their home contents insurance in the last year.

This was largely as a result of households having to cut back spending as they felt the economic pinch.