General Insurance Article - 90% of storm's insurance claims now fully or partly settled

The Association of British Insurers (ABI) is today able to report further progress with the clean-up in the wake of the winter storms. Of the 15,000 property claims received after Storms Desmond, Eva and Frank, 90% are now either fully or partly settled.

 For the first time the ABI is able to break down the figure for different types of property, which show:
  1.   94% of domestic customers have had their claims fully or partly settled
  3.   83% of commercial customers have had their claims fully or partly settled
 Commercial claims can take longer to settle because some of them are for very large values and because claims for business interruption cover can often only be finally settled once accounts have been provided so the impact on loss of profits can be accurately calculated.
 The final bill for all repairs is expected to reach £1.3 billion.
 Mark Shepherd, Manager of General Insurance Policy at the ABI, said: “For everyone affected by December’s storms we know the repairs to their homes and businesses can’t happen soon enough. These latest numbers show insurers continue to make good progress with the important work of getting everyone’s lives back to normal. Insurers are committed to getting all customers back in their properties as safely and as quickly as possible and there is the same sense of urgency now as in the immediate aftermath.”
 After the floods – Q&A
 Why do flood damaged properties take so long to repair?
 The drying stage is one of the most important parts of the repair process, and it can take a significant amount of time.
 When properties are flooded by several feet of water, it gets deep into the brickwork and structure of the building. The building needs to be completely dried out before repairs and rebuilding start, and that means dry deep into the walls, not just dry at the surface. We know new technology is being used more often to speed this process up where possible but it isn’t always suitable for all properties.
 Repairs done to a property which isn’t completely dry may create future problems for the owner or resident. There also needs to be full decontamination to ensure the property is safe to return to.
 What’s happening to people whose properties aren’t fixed yet?
 Where properties aren’t ready for people to return to them, insurers will be funding alternative accommodation as required. Some people may choose to live in the upper storeys of their property or to stay with friends or family members instead. Businesses may also be offered alternative premises to trade from for a period.
 Why have some claims not had any money paid out so far?
 Payments have been made towards 90% of claims. Where payments haven’t yet been made there are several likely reasons for this: a contractor carrying out work may not yet have yet billed the insurer, or the policy holder may be choosing to plan other improvement works on top of the repairs for example. Insurers will look to make interim payments where necessary and provided £70 million in emergency payments in the immediate aftermath of the floods, to both homes and businesses.
 What can people do to reduce the chance of their home or business being flooded again?
 Repairing a property after a flood gives home and business owners a valuable opportunity to think about installing flood resistance and resilience measures which should help keep the water out in future, or reduce the damage done.
 Measures to consider include individual flood gates, waterproof plaster, tiled floors and even stainless steel kitchen units.
 How will people who were flooded in December be able to find insurance in future?
 Properties which have flooded or are in high risk flood areas can face higher insurance bills because it is much more likely the insurer will need to pay out to deal with a flood, which can cost tens of thousands of pounds. Insurers were worried about people in flood risk areas starting to find cover unaffordable so, along with Government, they created a new scheme called Flood Re which is now up and running. This is a scheme which helps householders find more affordable cover, funded by a levy on the industry, and companies taking part are listed here.
 Businesses should consider using a specialist broker and ensure they fully understand the risk of flooding to their premises so they can make their business as resilient as possible, potentially by installing flood resistance and resilience measures.
 It remains vital that Government invests in the long-term flood risk management of these areas in order to better protect them from the chances of future flooding. The ABI will continue to lobby for greater investment from core Government expenditure for the effective management of flood risk throughout the UK.

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