Floods send home insurance to record high

By Jennifer Hill

LONDON (Reuters) - Home insurance premiums have risen to their highest level in more than a decade, following the flooding that ravaged parts of the country last summer, new figures from the AA show.

Average quoted premiums for home buildings insurance rose by 1.4 percent to an average of 218.60 pounds for an annual policy over the past quarter -- the highest level since the AA started its British insurance premium index in July 1994.

That follows a rise of 3 percent in the previous quarter -- the largest single increase since the inception of the index.

Home contents premiums rose by a more modest 0.4 percent in the three months to January, taking the cost to an average annual 150.57 pounds.

The rises reflect the 750 million pounds-worth of domestic property claims following the worst flooding in Britain in 60 years in some parts of England last summer, which forced 14,500 families into temporary accommodation.

"The average cost of each of these claims is approaching 52,000 pounds," says John Close, insurer relations director at the AA.

"Buildings insurance premiums are at their highest since the index began, but I'm surprised that premiums have risen so little over the past quarter."

He urged the government to include "robust provisions" in its Climate Change Bill to ensure new buildings are more flood and storm resilient, particularly in light of the renewed flood threats this month.