Norwich Union is to raise domestic property insurance premiums by an average of 10% from next week, the BBC has learned.
Norwich Union is to raise domestic property insurance premiums by an average of 10% from next week, the BBC has learned.
The firm, the UK's largest household insurer, said that the hike was not linked to the recent floods and that the timing was coincidental.
The firm, the UK's largest household insurer, said that the hike was not linked to the recent floods and that the timing was coincidental.
Norwich Union insures about one in five homes in the UK.
On Thursday the firm warned that the summer floods could cost it about £340m in payouts to customers.
On Thursday the firm warned that the summer floods could cost it about £340m in payouts to customers.
A spokesman said the firm had been assessing the levels of its premiums for some time.
Lloyds TSB denied a Times report that it was also raising premiums by 10%
"It is too early to say yet whether there will be any increases and what they will be if there are any," said Lloyd's spokeswoman Mary Walsh.
Repair cost rise
Repair cost rise
Norwich Union insures about one in five homes in the UK.
A spokesman said the firm had been assessing the levels of its premiums for some time.
Norwich Union's parent company Aviva has told investors that the recent floods in the south of England would cost it £165m.
Norwich Union's parent company Aviva has told investors that the recent floods in the south of England would cost it £165m.
Earlier it estimated that floods in the north of the country would lead to a bill of £175m.
Earlier it estimated that floods in the north of the country would lead to a bill of £175m.
The company said that flood risk was just one element of why they had reassessed premiums.
The company said that flood risk was just one element of why they had raised premiums.
More home improvement, increasing numbers of bathrooms in homes, and expensive flooring had raised the cost of repair work, the company said.
More home improvement, increasing numbers of bathrooms in homes, and expensive flooring had raised the cost of repair work, the company said.
But the spokesperson added that those households in flood risk areas would see higher increases than others.
But the spokesperson added that those households in flood risk areas would see higher increases than others.
BBC economics editor Evan Davis said that people should expect to absorb some of the costs of the floods through their insurance premiums and in increased prices for foodstuffs such as bread, milk and some vegetables.
BBC economics editor Evan Davis said that people should expect to absorb some of the costs of the floods through their insurance premiums and in increased prices for foodstuffs such as bread, milk and some vegetables.
Are you worried that your insurance premium could rise? How will the increase affect you? Send us your comments and experiences.
Are you worried that your insurance premium could rise? How will the increase affect you? Send us your comments and experiences.
