Lower numbers of home insurance claims during the pandemic have contributed to a drop in premiums, Moneysupermarket has found.

The average cost of building and contents cover has dropped by more 2.1% since the end of 2020 to £141.12 a year.

The comparison website says that average annual premiums are at their lowest since Q2 2019, following three consecutive quarters of price cuts.

Its research is based on customers comparing quotes online, so therefore does not cover the average premiums paid by those who renew with their existing provider.

London saw the largest drop in combined buildings and contents premiums, down by £6.63 since December. 

Northern Ireland was next with a fall of £3.89 on the average premium.

Until last year the average cost of home insurance had been rising steadily, reaching seven-year high of £146 in Q2 2020.

This decline is in part due to a reduction in claims during the pandemic, which makes insurance more profitable and can lead to reduced prices. There is also increased competition in the home insurance market, which causes insurers to lower premiums to attract customers.

While certain postcode areas experienced an increase in costs, every region in England, Scotland and Wales saw combined policy costs dip this year.

Head of home insurance Kate Devine says: “Consumers will be glad to see that prices are coming down, and this decline may well continue over the coming months. 

“Lockdown has led to fewer claims and extra competition for customers, and both generally mean lower premiums.

“Prices remain high, however, and the easing of restrictions may see more claims, which could push prices in the other direction. 

“It’s therefore crucial for consumers to take matters into their own hands and shop around to make sure they get the level of cover they need at the best possible price.”