Out-Law News 1 min. read

Winter floods to cost UK insurance industry £1.1bn, says ABI

The UK insurance industry is expected to pay up to £ 1.1 billion to customers whose homes, businesses and vehicles were damaged as a result of storms and flooding during the “ wettest winter on record ” , according to the latest figures from the Association of British Insurers (ABI).

Figures released by the industry body showed that its member insurers received 17,500 flood claims and 421,500 storm damage claims between 23 December and 28 February. Flooded customers have already received emergency payments of £27 million, according to its statistics.

“Insurers and loss adjusters are playing a crucial role in the recovery process,” said Otto Thoresen, the ABI’s director general. “A badly flooded property can take months to become habitable again, so insurers continue working around the clock to ensure that the drying out process is completed as quickly and as safely as possible.”

“While of course this was a serious and significant bad weather event the current flood damage costs remain well below the severe floods of 2007 when insurers paid out £3bn to customers,” he said.

According to the figures, the industry is expecting to pay out around £450m for flood claims and £650m for the more common, but less costly, storm damage claims. Insurers have so far received 9,000 flood claims from homeowners, 3,100 from businesses and 5,400 in relation to flooded vehicles. They expect to pay £276m to flooded homeowners, £149m to business owners and £22m to vehicle owners, according to the figures.

A commitment by the insurance industry to continue to offer flood cover to existing customers where the risk is not “significant” or where the government has announced plans to reduce the property’s flood risk within five years is due to come to an end next year. It is due to be replaced by a new affordable flood insurance scheme called Flood Re, funded through an industry-backed levy payable by all UK household insurers. However, the scheme as anticipated would not cover commercial property or high-value homes.

We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.