UK Flood Claims Are Being Assessed and Settled, Says ABI

Insurance payouts to people hit by the recent floods in Yorkshire and the Midlands are expected to reach £110 million, according to initial estimates out today from the Association of British Insurers (ABI).

Insurers have already made initial emergency payments of over £1.2 million to help flooded homeowners and businesses in the immediate aftermath of the flooding. In addition, at least £680,000 has so far been paid in re-housing the worst hit flood victims in alternative temporary accommodation, where their homes have become uninhabitable.

Initial ABI estimates show:

So far just over 4,000 (4,039) flood claims have been received: 2250 of these relate to flooded homes and businesses; 1788 to damaged vehicles.

–Of the estimated £110 million payouts, £45 million covers damaged homes and possessions; £58 million for business property and stock, with £7.5 million relating to damaged vehicles.

-The average household flood claim is likely to be around £31,000, and £70,000 for a flooded business. This compares to the average claim across all insured risks of £2,200 under a home insurance policy and an average claim of £11,500 on a commercial policy.

Mark Shepherd, ABI’s Assistant Director, Head of General Insurance Policy, said:

“Insurers’ first priority when the floods struck was to help flooded customers recover from the traumatic experience as quickly as possible. Making emergency payments, and arranging alternative temporary accommodation where needed, helped many people cope in the immediate aftermath.

“Now the flood waters have receded, the hard work begins. Insurers and loss adjusters are working around the clock to ensure homes and businesses are fully dried out, so that repairs can start as soon as possible, and people can get their lives back together.”

INDUSTRY COMMENT

Mark Eastham, CEO of Avantia

“With the rise of extreme weather, such as the North of England receiving a month’s worth of rain in a single day last week, many home owners are finding out too late that they don’t have the right insurance.

“There are a variety of factors for this, and as weather patterns change, people might find that they are now living on a newly formed flood plain without realising it.  This presents a huge problem, and not just for home owners.

As this level of flooding becomes more common, it’s increasingly difficult for insurers to accurately price homes, with flood plains and similar impacts of climate change, pulling more and more homes into the non-standard category.  Technology, such as machine learning and predictive algorithms, will be crucial in providing a much more detailed and accurate risk profile – which will help both insurers and consumers deal with these different dynamics to property insurance.”