Although  home insurance premiums changed little over the first quarter of 2008, insurers are far more cautious about issuing quotes. 

According to the AA British Insurance Premium Index, the average premium for buildings cover fell by just 42p to £208.51. The Shoparound premium, which is an average of the lowest three quotes, fell by just 34p.  Average contents insurance premiums rose by only 1.0% to £128.57. The Shoparound premium rose by 0.3% from £70.08 to £70.29.  

"I expected the upward trend in premiums since last July's flooding to continue," comments Andrew Strong.  "I believe the slight fall in average quoted premiums for buildings cover is explained by a rise in the number of risks not being quoted by some insurers, suggesting sensitivity to flood risk." 

But Strong says that this does not mean families will find their homes becoming uninsurable. "It is more likely that insurers will want to know more, for example what flood protection measures are being taken by local authorities, before quoting.” Existing insurers are expected to continue to provide cover following a flood.

Under the ABI Statement of Principles for the Provision of Flood Insurance the industry agrees to insure flood-risk customers provided adequate investment in flood defences continues.  However Strong warns: "The Government shouldn't take it for granted that the agreement will continue to be renewed indefinitely. It's vital that proper investment is made to protect homes and businesses from flood risk and that careful consideration is given to the location of new housing stock."