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Storm Desmond: Insurance Advice For Flooding Victims

Insurers say a “small army” of claims managers are at the scene of flood-hit areas, but they urge affected residents to follow advice to protect any claims.

Rapid response teams are now sent by insurance companies to major incidents, following criticism of their reaction to the UK’s 2007 deluge.

Householders hit by Storm Desmond have been told to stay safe, but to act to reduce risks of further damage or loss.

This includes locking up unattended homes and keeping evidence of damage.

Thousands of homes have been evacuated or are without power in Cumbria after Storm Desmond hit northern England and Scotland.

James Dalton, director of general insurance policy at the Association of British Insurers (ABI), said: “Flooding brings misery to homeowners and businesses, which is why insurers are pulling out all the stops to help their customers recover as soon as possible.

“While it is too early to say what the cost of the flooding will be, insurers are geared up for events like this and have mobilised their contingency plans to help customers through this stressful time.

“While it will take time for badly flooded properties to fully dry out, insurers will arrange temporary alternative accommodation while properties are uninhabitable.”

The association said insurers would give priority to any elderly or vulnerable people who were affected.

Advice from the British Insurance Brokers’ Association to those affected includes:

  • Contacting their insurer or insurance broker and informing them before conducting any emergency repairs
  • Leaving dangerous work such as fixing the roof to professionals
  • Turning the power off, if safe, in a flooded home
  • Ensuring homes are safe and secure before leaving to prevent further loss
  • Keeping damaged items for evidence of a claim, including samples and photos of carpets, and receipts for any emergency work

Meanwhile, many business insurance policies cover damage to premises and stock, but loss of trading owing to interruption is usually only covered if firms have paid an extra premium as an add-on to their policy.

How does this compare to previous flooding?

At present, the latest flooding is not the worst to have hit the UK, with about 5,200 homes having been flooded so far.

The frustration and upset for many of those affected is that they have been hit before. For example, Cumbria was hit by devastating floods in 2005 and 2009.

Some 25,000 flood and storm claims were made to insurers following the 2009 floods, with £174m paid out.

All these incidents were still far smaller than the 2007 floods across swathes of the UK, which led to claims of £3.2bn.

What compensation is available to those without power?

There is provision in place for compensation to be paid to those who suffer lengthy power cuts as a result of storm damage.

The amount of time that power is off and the severity of the storm are key to compensation levels.

They are currently being assessed.

Are refunds available for affected rail journeys?

The line between Carlisle and Scotland is expected to be closed for at least the next couple of days.

Virgin Trains, which operates this route on the West Coast Mainline, said that anyone who was unable to travel would be eligible for a refund, or could use their ticket at a later date. Those whose journeys were disrupted by more than 30 minutes would also be entitled to compensation.

Those passengers who booked their ticket through the Virgin Trains website for a specific train will receive their refund automatically, but others will need to fill out a form on the website.

A passenger watchdog said that a review was needed of information provided to customers

“Many rail passengers trying to get to and from the North West [of England] and Scotland had a tough time after disruption caused by flooding and storm damage,” said Anthony Smith, chief executive of the independent watchdog Transport Focus.

“We’ve heard of people left without information and staff no better informed, while online information was patchy.

“It is right that train operators’ immediate focus is on restoring services as quickly as is safe to do so, but questions do need to be asked about passenger information accuracy. What we want to see now is clear, pro-active advice for those affected on how to claim compensation for their disrupted journeys.”

Will this affect future insurance claims?

A guide has been published for those wanting to obtain flood insurance who live in areas at high risk of flooding.

Many of these householders are concerned about high premiums, high excess and a lack of access to insurance.

A new scheme, known as Flood Re, has been agreed between the government and insurance industry and is planned to start in April.

Under the scheme, residential homeowners in areas with the highest flood risks should be able to shop around for insurance, because the extra risk involved will be passed from the insurer to an industry body, called Flood Re, which is sponsored by the government.

Insurers will choose which properties are deemed suitable for the scheme. Businesses, including landlords, are not covered by the programme.

Brendan McCafferty, chief executive of Flood Re, said he expected insurers to be more likely to use the system now, with the latest flooding impact coming so close to the launch date.

There is an issue for those whose insurance renewal is due before April. Mr McCafferty said these householders might decide that cancelling a policy a few months into the year – which may mean being charged – and shopping around for a new deal would be a cheaper option once the system was operating.

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