Abacus Daily Debt News

Debt strain may rise as insurance premiums

Homeowners struggling to pay off debt and potentially facing difficulties with their mortgage repayments might be left facing further financial strain as home insurance premiums increase this year.

Such a development has been predicted by John Portwood, personal lines insurance broker at Portwood & Co.

He said upgrading in line with inflation will be one cause of the increase, but said the economic downturn may also have the effect of pushing premiums up.

"With the recession there are probably more fraudulent insurance applications - especially over the internet - and claims," Mr Portwood stated, noting insurers will have to factor this in due to the extra costs such actions incur.

However, the broker noted, people need to remember their home is "their largest single investment" and that the cost of insurance is less important than ensuring they are covered for major problems.

Recent research by Confused.com indicated motorists were most likely to face substantial increases in car insurance costs if they lived in the north of England last year, with Bradford seeing the highest average premium rise at 17.1 per cent.

By James Francis