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Assetsure News 10th July 2007
Flood News Update - We have noticed at
Assetsure an increase in applications for building insurance in the last few
weeks as the unseasonably wet weather has highlighted the need for flood
insurance protection. In the Uk , there
are still a large number of homeowners who do not bother or simply cannot afford
to buy home building insurance. We would agree that building insurance is
probably not the most exciting of purchases and we all can think of better
things to spend money on. However, your home building and its contents probably
represent the largest lifetime investments and thus if possible insurance
protection should be obtained.
If you have a mortgage on your property,
obtaining building insurance will be a condition of the loan and you should
maintain insurance in force at all times. If you rent your property and do not
live in a city, you will find that contents insurance can still be purchased
relatively cheaply. If many rural areas you can still obtain £20,000 contents
insurance for £70.00 per annum. Divide this up on a weekly basis and providing
insurance protection against flood and a whole list of perils looks cheap
Many people do not bother with contents
insurance as historically they have never made a claim and they consider it to
be a waste of money, often when a mortgage is fully redeemed, the premiums for
building and contents insurance cease, sometimes as a result of the homeowner
having to arrange their own insurance policy and not getting around to it. Alas
looking back over the years is not a good arbiter when it comes to floods, due
to climate changes many areas of the United Kingdom that have never experienced
floods in living memory are finding themselves deluged with water. Unless you
have first hand experience of the damage that floods can do , it is often hard
to imagine the terrible impact one can have on your property. Many households
following a flood find that an insurance claim can easily be in excess of
£20,000 by the time everything is settled. In simple terms, as a homeowner you
could you easily find that sum of money to reinstate your home following a claim
for flood damage.
The recent spate of bad weather is likely to
produce claims totalling in excess of £1.5 billion pound of which 825 million
will in all probability be attributed to domestic homeowner claims. These
figures released by the chartered institute of loss adjusters seem huge but the
claims have been backed up by the Association of British Insurers who's own
statistics indicate claims of around 1 billion pounds.
The Association has estimated that approximately
27000 homes and at least 5000 businesses have been affected by the recent
floods, mainly in Northern England and with more rain looking likely, these
numbers are set to rise. If you are running a business simply having building &
contents insurance will not be sufficient for your needs, whilst an insurance
policy will usually cover flood damage to your building or contents and stock
for example, you should also make sure that you have business interruption cover
to take car of your loss of revenue for the time that you are unable to trade.
This part of an insurance policy is often overlooked or simply not issued on a
correct basis. If you have any worries that you are not adequately insured for
business interruption cover, you should check with your insurance advisor.
The association of British insurers is
calling on the government to increase spending on flood defences to 750 million
pounds per annum and the government seems to be listening having indicated that
it is willing to raise spending to 800 million. However, concern remains within
the
building insurance industry as to how exactly the money will
be spent, its a large sum of money by if spent unwisely will have no real
impact. Naturally the association of British insurers is worried about potential
flood claims made on its members but everyone would agree that it is far better
to implement measures that will stop flooding as being on the receiving end of
flood damage can be a very distressing experience. The government and insurers
need to work closely together to ensure that flood insurance cover remains
available under home insurance policies and that premiums for the worse affected
areas do not rise to a point where they are beyond the means of homeowners.
At the present moment insurance premiums in the
Home insurance market are worth around 6 million pounds
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Copyright Assetsure Limited 2007
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