With both the credit crunch and food prices starting to bite, it's a relief that when it comes to financial products such as insurance, the news is a bit better. According to recent research, home and car insurance prices have stalled rather unexpectedly. Even better, policies for travel and life insurance are now cheaper than ever.



Home insurance premiums were widely expected to go up following last year's disastrous floods. However, according to the latest British Insurance Premium Index from the AA, these price rises haven't happened. In the first quarter of 2008, average buildings insurance premiums actually fell by 0.2%, and they're still only 4.5% higher than when the Index started in 1994.

Average combined home and contents insurance premiums fell by 1.4% during the same period.

Andrew Strong of AA Insurance says that the slight fall in premiums for buildings cover can be explained by a rise in the number of risks not being quoted by some insurers, as they become more sensitive to flood risk. The floods were also expected to affect the price of car insurance - and the AA's index report reflects this: In the last year, the average annual premium quoted for comprehensive car insurance has risen by nearly 6%.

But there is hope: the latest figures show a slight reversal in the trend with average comprehensive car insurance premiums falling by 0.5% in the first quarter of 2008. According to AA Insurance, this is largely due to the time of year. Because it's currently a ‘peak period' for car insurance sales, many companies are holding rates down to try and gain market share.

Home and car insurance premiums are expected to rise again over the coming year, so act fast.

On a more positive note, if it's travel insurance you're after, there's some good news. A recent report by financial research company Defaqto has found that most travel insurance policies have never been cheaper.

The vast majority of single trip and annual travel policies have fallen significantly in price in the last year alone. For example, the average premium for a single, week-long, family trip to Europe has dropped by 6.2% since 2007.

Furthermore, the average annual cover premium for a single person travelling in Europe has dropped by 6.7%. Increased competition for travel insurance can be thanked for these falls. The large number of policies available online has triggered a price war between insurers, turning it into a real buyer's market.

If you're looking for life insurance, you'll be pleased to know that these premiums have plummeted in recent years. The average cost of life cover has fallen by 50% over the past decade so it might be worthwhile to trade in your existing policy for a new, much cheaper one.

Two main factors have caused these price falls: The life insurance market has become fiercely competitive, and people are living longer (therefore posing much less of a risk to term-assurance companies and helping to drive premiums down).

It seems that now is a good time to take out a new insurance policy. This is particularly true of car and home insurance, as premiums are likely to rise - possibly steeply - in the months to come.

If your current policy is up for renewal, remember to shop around rather than automatically renewing with your existing company. You're likely to get a much better deal as a new customer. And if you are thinking of switching policies early, make sure you check what cancellation or early termination fees apply.