Counting the cost of the recent Floods – With the clean up under way, both insurers and homeowners are beginning to count the cost of the extensive floods that hit the United Kingdom in June & July. The Norwich Union, one of the UKs leading insurers has suggested that it’s costs for the floods were likely to reach 340 million pounds. Lloyds TSB were reporting that they expected to pay t up to £45 million. Despite these rather sizable amounts of money for flood damage claims, occurring of course when least expected, Moodys the credit rating agency, says they will do little to dent the financial standing of the UK industry as a whole and especially the positions of the Key players who are all financially stable with strong balance sheets.
The Association of British Insurers state that claims look likely to top 2.5 billion pounds in total. Many people consider the leaked news that Norwich Union intend to rise home insurance premiums by 10% to be rather cynical. Other insurers at the present moment are rigorously denying that they plan any premium increases in the near future. However Norwich Union are a market leader for home insurance products at it is likely that if they increase premiums, the other leading UK insurers will follow suit.
Norwich Union deny that this increase has anything to do with the recent losses and that it was a planned increase anyway. That aside the principle of insurance is to operate on a pooling system and insurers will make calculations to ensure they have monies in hand to cover future losses. With global warming and weather patterns in our country becoming more eccentric, it is fair to say that in the coming years we will all have to pay extra premiums in to the insurance pool, to cover home insurance losses by flooding and other weather related claims.
Luckily we have a very developed market place for home insurance in the United Kingdom and anyone that receives a renewal notice with a large premium hike is of course able to shop around from a large number of insurance providers. You should receive your home insurance renewal notice at least 21 days prior to your renewal date and this will give you ample time to shop around for a better deal.
If you are worried about the cost of your home insurance, make sure that you are providing your insurer with all of the relevant information, any improvements you have made to the home in recent times, could qualify you for a discount.
- Increasing your policy excess ( the first portion of the loss you pay, should secure you a discount. If you haven’t claimed for years and have a proactive attitude to insurance claiming then maybe a larger excess in return for a discount from your Buildings & Contents insurance policy is a good idea, most insurers will consider a voluntary excess of up to £500.00. Please remember though that any voluntary excess is in addition to any compulsory excess on the policy.
- Remember to point out any extra security measures you have installed at the property. Have you recently fitted new locks, have you installed double glazing, do you have a burglar alarm or security lighting. Some insurers will still provide a discount if you have joined a neighbourhood watch scheme.
- Many insurance companies now operate a no claims discount. If you have been claim free for a number of years, you may be able to secure a discount.
- Many insurers also give discounts for age, so if you have had a threshold birthday in the last 12 months, it’s worth seeing if you can obtain a discount from your home insurance.