Insurance premiums to be affected by flood costs
August 22, 2007
This June in the UK was one of the wettest on record, with torrential rain and bad weather causing severe flooding and vast amounts of damage in some areas of the country, leaving many without a food over their heads and even resulting in fatalities.
As a result of the high level of damage caused by the rain insurance companies have been flooded by claims from homeowners that have incurred thousands of pounds worth of damage, and insurers have had to pay out millions of pounds in these claims.
According to reports the flooding that has been seen in the UK over recent weeks is the worse in sixty years, and this is reflected by the level of damage and the number and amounts of claims that have been made by homeowners that have been hard hit by the floods. Recent reports now indicate that the cost of both buildings and contents cover is likely to go up as a result of the number and level of claims that have been received by insurance companies across the UK.
Norwich Union, one of the major home insurance companies in the UK, has already stated that the cost of its premiums will be affected, and that customers taking out cover will now have to pay around 10% more than previous premiums. It is not just those that have had to make a claim for flood damage that will therefore be hit for higher insurance costs, but all insurance customers.
An official from Direct Line insurance stated: “We do recognise that premiums will rise, and that goes for all RBS brands.” According to another insurance expert: “People are spending more on home improvements. When things go wrong they’ve got flat-screen televisions and expensive flooring. So, when the do damage, it’s costing us more.”
Alan Wright
22nd August 2007
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