How insurers are using climate change as an excuse to TRIPLE the cost of home cover


Insurance companies are using global warming to justify a huge hike in home cover premiums — even if the homeowners don’t live near rivers or the sea and have never made a claim for storm damage.

In some cases, households have seen the prices of building and contents policies as much as triple, with ‘changes to weather patterns’ given as the reason for the rocketing costs.

Online boutique owner Helena Adams, 66, lives in a £575,000 three-bedroom house in Harrow, north-west London — with the River Thames eight miles away.

She could not believe her eyes when she opened a letter from insurer Esure in July and read the words, ‘following changes to weather patterns we have reviewed the risk associated with your property’, as an explanation for hiking her home insurance from £291 to £687.

Helena was understandably baffled. She says: ‘About 15 years ago, a living room radiator valve leaked on the carpet and we made a claim. That is the closest to flooding or storm damage we have got.’

Bill storm: Insurance companies are hiking the cost of home insurance premiums with ‘changes to weather patterns’ given as the reason

Incensed, Helena cancelled her Esure policy and took out a like-for-like deal with MBNA Bank for £218 a year — £73 less than she’d paid with Esure the previous year.

Freelance journalist Rosie Murray-West was also told in the summer that as a result of changes to weather patterns, her premiums with Esure would be rising from £374 a year to £1,186.

Like Helena, Rosie does not live in the storm-battered Channel Islands, near flood plains or on the edge of a cliff.

Rather, her four-bedroom property is at the top of a hill in South London and five miles from the River Thames.

She says: ‘I was sent a standard letter with no explanation for the unjustifiable price hike other than blaming the weather. 

What nonsense to use global warming as an excuse to hike premiums. I am now paying £400 a year with competitor More Than —about the same cost as before.’

Barbara Penhallow saw her home insurance with Swiftcover — part of the insurance giant Axa — also treble when her buildings and contents policy came up for renewal in June.

The 69-year-old retired accounts clerk from Croydon, south London, first knew about the hike when she was sent an email titled ‘sit back and relax’. 

But reading that her premiums for her £500,000 three-bedroom Edwardian terraced home would rise from £178 to £542 had the reverse effect.

The email also included the message: ‘Great news! We’ve made sure your renewal price is the same or even better than if you were a new customer on a like-for-like quote’.

A perplexed Barbara immediately called Swiftcover and was neither given an excuse for the hike nor a better price.

However, when she then called parent firm Axa, they admitted a ‘huge range of factors’ were considered when calculating the annual premiums which included ‘heatwaves, floods, unexpected summer storms and cold snaps’.

However, nothing had changed about Barbara’s home to warrant the £364 hike and she has never made any claims. 

‘I have seen the effects of global warming first hand — with a recent holiday in Mauritius where you could see that the sea levels had gone up by almost a foot. But the nearest coastline from my home is about 50 miles away in Brighton.

‘We have recently had a lot of rain but this cannot be used as an excuse to ramp up charges.’

Cover costs: Home insurance quotes have risen on average by almost 25 per cent for the 12 months to June

Cover costs: Home insurance quotes have risen on average by almost 25 per cent for the 12 months to June

She adds: ‘The problem is that insurers treat us like fools — and hope we will automatically renew and swallow any old excuse for the hikes. 

But when I saw what they were doing I threw a wobbly and switched to More Than, where I am now paying £242 for a near-identical policy.’

Research company Consumer Intelligence has found home insurance quotes rose on average by almost 26 per cent for the 12 months to July. 

It believes inflation is one of the biggest factors — affecting the price of building materials and labour for home repairs. 

But the firm also points to the ‘impact of hotter summers and wetter winters increasing flood and subsidence claims’.

The average cost of home insurance in Britain now stands at £315, according to the Association of British Insurers trade body. 

The trade body says insurers paid out £473million to 170,000 customers in February to homes damaged by storms — and that June’s heatwave could lead to a ‘significant rise in claims for subsidence’. In addition, it says higher general repair bill costs are pushing up premiums.

James Daley, of consumer website Fairer Finance, says: ‘Global warming has been known about for the past few decades and weather events relating to this should already be factored into premiums.’

He believes the real reason home insurance premiums are rising has little to do with the weather.

It is a result of rising claim costs — and new Consumer Duty rules introduced at the start of last year by the Financial Conduct Authority aimed at stopping insurers exploiting loyal policyholders with higher premiums than those paid by new customers. 

The regulator’s intervention was well intended, but it has pushed up premiums right across the board.

Daley also says Consumer Duty rules have not helped. These now require insurers to be more open with customers about why premiums are being pushed up. Some insurers are using changing weather-related factors to explain away the increases.

‘Whatever reason an insurer gives for a premium increase,’ he adds, ‘the customer should not take it at face value. They should always shop around.’

This is Money’s sister title Money Mail contacted a dozen major home insurers asking how they can justify using weather for price hikes.

The majority — including Esure, Churchill, NFU Mutual, Direct Line, Hastings Direct and Endsleigh — ignored our request for answers or said they were ‘unable to help’.

Aviva said: ‘We constantly analyse data to understand the latest weather patterns — monitoring to predict future risks. 

‘When calculating costs there are many factors to consider — such as the number of claims being made, increasingly expensive repairs and also severe weather.’

An Admiral spokesman said: ‘We are aware of the potential impact climate change may have on the frequency and severity of weather events in the future. 

‘Claims experience and models used to predict future weather, such as flooding and storms, are factored into our pricing methodology to try to accurately reflect risk.’

Axa said: ‘Climate change is increasing the number and severity of adverse weather events — leading to a rise in the frequency and severity of claims.’

Halifax said: ‘We have an expert in-house weather monitoring team that regularly reviews the climate and adjusts risk models to account for change. 

We do not change prices due to natural variation year-on-year but reflect the underlying trend of greater risk a warming world has created.’

RSA Insurance said: ‘The frequency and severity of weather events has increased in recent years, and we are keeping a close eye on this.’

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