The total bill for the year just ended is likely to be between pounds 800m and pounds 900m, according to the Association of British Insurers. This compares with claims ranging from pounds 300m to pounds 500m in an average year.
The latest storms will give rise to a large number of individual claims for structural damage, insurers say. But most individual claims will be less than pounds 500 and the total bill for the industry could well be less than pounds 20m, compared with the widespread damage caused by the January 1998 storms, which cost over pounds 200m, and again by the floods last Easter and in October, both of which presented insurance companies with bills in excess of pounds 100m.
Mortgage lenders normally insist that all properties are surveyed and adequately insured, and insurance values are increased each year to take account of the impact of inflation on rebuilding costs. The properties that are most at risk of being under-insured are those where the mortgage has been paid off or was taken out years ago, before property values began to escalate.
Many homes are still under-insured for contents, however, mainly because owners forget to adjust their cover when they buy new items for their homes, and one in four homes still have no contents cover at all.
Homeowners can obtain a free fact sheet on how to calculate rebuilding costs according to the age, size, location and type of property, and a guide to valuing the typical contents of individual rooms, by writing to the ABI at 51 Gresham Street, London EC2V 7HQ enclosing an sae.Reuse content