Insurance costs of summer floods rise to £1.5 billion

Insurers are now well advanced in assessing the damage caused to homes and businesses by the recent floods and storms.

The Association of British Insurers (ABI) now estimates that some 27,500 homes and 7,000 businesses were affected. The increased number of business claims, together with clearer information about the amount of damage to many homes, has led us to revise our previous cost estimate to around £1.5 billion.

Stephen Haddrill, the ABI’s Director General, said “Insurers continue to work flat out to help customers in these difficult times. Families, elderly customers, those with health difficulties and getting businesses back to work are our priority. And we will be talking to our customers about how we can help them avoid the trauma of a similar event in future, for example through using more flood-proof building techniques.”

The majority of properties have now been visited and insurers expect to have completed this initial process by early next week. Clean up operations are underway and work has started to dry out properties and begin repairs. Interim payments are already being made to businesses and motor claims are being paid.

The insurance industry has mobilised staff and contractors from around the country to meet the enormous challenge the widespread flooding has brought. We are working with the Government and local authorities to put families, businesses and communities back to normal as quickly as possible.

The ABI also endorses recent advice from the FSA that flood victims should think very carefully before engaging the services of a claims management company in submitting an insurance claim. Such companies will take a slice of any claim paid, which could leave householders short of the money they need to repair damage and replace possessions.