Yahoo Finance Floods: Insurance Firms Fail To Rule Out Hike
Insurance firms have refused to rule out an increase in premiums in the wake of a so-called Downing Street summit meeting with ministers.
Following the meeting insurance chiefs admitted it could take months to assess and repair damage to people's homes and said that the Government had made no demands on them during discussions.
It had been suggested that the aim of the meeting was to speed up the payment of insurance claims to those thousands of families whose homes had been badly affected by the flooding.
The Association of British Insurers head of property Aidan Kerr told Sky News: "It's to early to say whether this will have an impact on premiums."
While the ABI director general Otto Thoresen said that the industry response to the flooding would be "delivered through the rest of this year" suggesting that claims would take some time to process.
But he said repairs had to be "properly delivered" and sustainable for the quality of life for people in their homes in the future."
Labour branded the meeting, which took place at the Cabinet Office after being billed as a No 10 meeting and was attended by "junior ministers", a "vacuous PR stunt".
Shadow Cabinet Office minister Michael Dugher said: "The Government's transparent attempt to try to grab a few headlines does nothing for those affected by the floods. Three hapless junior ministers booking a meeting room does not constitute a serious response to the flooding crisis.
"But is indicative of David Cameron's whole approach - out of touch and totally complacent."
However, Flooding Minister Dan Rogerson told Sky News that insurers had stressed their commitment to the Flood Re scheme, which was agreed with the Government in the summer, and will provide affordable insurance for 350,000 homes at high risk of flooding.
Under the agreement, which will come into force from 2015, annual premiums will be capped and repairs for flood damage taken from a central funding pool. There has, however, already been criticism that the scheme will push premiums up for everyone.
Jenny Scott in Yalding, Kent, saw her home flooded on December 23 and has been without electricity since. She told Sky News she has been alarmed by the attitude change of insurers this time around.
She said: "Because I suppose we're in much more straitened financial times than we were in 2000 when we were last flooded, insurance companies are really penny pinching and are questioning everything that you think should be going and I think the hard thing is not to be worn down by it."
She has employed a private loss adjuster to deal with her claim and has urged other victims to do likewise to ensure they get the maximum amount of compensation.
Although the flood waters have left her house, loss adjuster Gary Rogers has warned it will take a long time yet for it to dry out and for repairs to be carried out.
"You're looking at a six to 12 month process especially with the level of claims going through at this moment in time.
"Insurers and their representatives are finding it difficult to deal with in this unprecedented situation."
Insurance bosses representing 60% of the industry, including the chief executives of Aviva (Other OTC: AIVAF - news) , Direct Line and Axa (Paris: FR0000120628 - news) , attended the meeting after Mr Rogerson urged a "stepped-up national effort".
Insurance companies say they have already made £14m worth of emergency payments to households and businesses since December 23 but it is estimated the total bill could run to £1bn.
At least £24m has been spent on alternative accommodation such as hotels, bed & breakfasts and rented properties with the average estimated cost per household expected to be £16,500.
Thousands of staff have been reassigned to deal with customers since the start of the flooding to ensure they get the assistance they need.
There have been more than 5,000 visits by loss adjusters to assess damage to properties.
Two severe flood warnings - which mean there is a danger to life - remain in place for the South West, while there are another 108 less serious flood warnings, largely in the South East (HKSE: 0726.HK - news) and Midlands.
Labour leader Ed Miliband, who was visiting flood-hit areas of Somerset, called for much quicker insurance pay-outs and said: "Of course it takes time to repair homes damaged by flooding, but 12 months to complete an insurance claim is far too long.
"The Government must sit down with insurers and agree a new industry standard that significantly reduces the time that people have to wait to have their houses restored and move back home."
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