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13th March 2008
Stormy Weather Ahead for Insurers
The bad weather seems to be back in the United
Kingdom with a vengeance , the last few days have seen parts of the United
Kingdom battered by, first high winds and then torrential rain. News reports
show large parts of the United Kingdom effected, although at this time, property
damage does not seem to be that extensive which is good news for Insurance
Companies, still reeling from payouts made last year.
Its fair to say that the last 12 months have seen some odd weather patterns
occurring across the country and what has shocked most people has been the sheer
intensity of the storms witnessed. With this in mind and scientists telling us
that these patterns are set to continue, the news that Sainburys Bank estimates
that as many as 1.78 million homeowners are without building insurance
protection seems almost unbelievable and the indiscriminate nature of the
weather could leave many facing large bills for damages. It is estimated that a
fairly typical " weather insurance" claim will be around the £700 mark and
that's for fairy minor damage. However, home owners that are forced to make
claims for floods may be shocked to hear that an average flood claim can cost in
excess of £30,000 to include all the restoration work and replacing the damaged
items. Sainburys added in their report that a further 656000 people where not
sure if they had any insurance or not. Lloyds TSB an insurer with a large book
of home Insurance risks reported that insurance claim reports were up by 150%
this Monday morning and the bulk of them related to weather related incidents.
Although house insurance premiums have increased during the last 12 months,
consumers have not seen the major price hikes that were anticipated, there are
still a large number of insurers offering excellent deals on this type of
product and anyone with access to the Internet is able to quickly source a
competitive quotation. If using on line quote facilities, it is important to
read the small print as sometimes that " cheap home insurance deal" can mask a
fairly large excess. Also, always make sure you declare the full underwriting
information to the insurance company, the questions must be answered as
accurately as possible and need careful consideration, If they are inaccurately
answered and you later have to make a claim, you may find that your claim is
turned down.
For owners of unusual property, such as Thatched Buildings or
Listed Buildings, the choice is not so
extensive and it is important to make sure that insurance policies are kept in
force. There has been much speculation from various sources that some parts of
the country are becoming uninsurable, particularly those that has suffered from
wide scale flooding. It is true that insurers are becoming particular about
taking risks that are located on flood plains or have suffered from flood damage
in the past but anyone that has an existing insurance policy should find that
their insurance company will offer renewal terms to them. As time goes by and
if weather related insurance claims continue to increase in frequency and
severity, it may become harder to obtain cover if you have not had a previous
policy. In view of this it is probably wise to seek out building & contents
insurance at the earliest opportunity. Anyone still not convinced , they need
insurance protection should study figures released from the Association of
British Insurers.
They ABI have released figures on the cost of the June and July 2007 floods,
and the number of claims received, which break down as follows:
Total cost: estimated to be £3bn
Total number of claims: around 180,000
Total domestic claims: around 130,000
Total commercial claims: around 30,000
Of course if you have a property on a mortgage in will almost undoubtedly be a
condition of the loan to make sure that adequate insurance protection is in
force throughout the duration of the loan, failure to keep adequate insurance
protection in force will put you in breech of these conditions and your lender
may take action against you. Don't forget, if your property, suffers a severe
amount of damage and you have no insurance protection in force, you will be
required to reinstate the property out of your own funds, What ever happens, you
lender will still expect you to repay all monies owing on your mortgage.
One final point on mortgages for consumers, when
advancing money, your lender will require you to effect an insurance policy that
satisfies the terms and conditions of their lenders handbook. This book
contains a list of insurance perils that you will need cover against. If you are
unable to obtain cover against any of the perils mentioned, you may find that
they will be unwilling to advance a loan against the property.
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