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Extreme Weather Conditions Drive Up Home Insurance Premiums |
Written by Mark Skinner
Saturday, 17 May 2008
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Increasingly extreme and unpredictable weather could force up the cost of home insurance dramatically this year. According to an insurance industry report 90% of industry professionals believe that premiums are set to soar in areas most affected by floods or high winds, and they blame the government for not taking stronger preventative measures. Last summer the country was ravaged by floods and storms that saw large parts of Gloucestershire and Yorkshire underwater, whilst earlier this year the North of England saw heavy rainfall overwhelm defences once again. The huge number of claims made by homeowners in these areas has exceeded £3 billion pounds and the industry has no option but to raise the level of premiums to offset this enormous cost. But the Association of British Insurers has been complaining to the government for months that spending on the nation's flood defences needs to be drastically increased. Last September Stephen Haddrill, director-general of the ABI, stated that: ‘further steps can be taken. This flood defence budget of £800m that's been promised is only to be achieved in year three of the spending review, in three years. They've been looking at this for ages and if they've been able to come up with a figure for year three they should be able to come up with a figure for years one and two. Plus it should be at least £800m.' The ABI are now accusing the government of building at least thirteen major developments on floodplains and threaten that more and more properties are becoming uninsurable. The ABI's assistant director of property Justin Jacobs insists: ‘Insurers want to continue to provide flood cover, but poor planning decisions will lead to more homes becoming unsaleable, uninsurable and uninhabitable.' In recent years it has been government policy to subsidise heavily affected areas by raising the level of premiums across the country. However that may soon change due to increased competition, leaving those in flood-prone communities with greatly inflated amounts to pay. However, the immense damage wreaked by adverse weather conditions means that taking out a comprehensive home insurance policy is becoming more vital than ever. A recent report from Abbey Home Insurance states that just over one in ten properties have been damaged in the last five years at a staggering average cost of £2,699 per property. Another surprise is that 5% of this damage occurs within the property itself. Lloyd Wilson, head of Abbey Home Insurance product development, stresses that taking out cover is a much more cost effective way of dealing with such a crisis. ‘Bad weather damage is a costly inconvenience and for some people, especially in flood areas, it is becoming a yearly nightmare. Our research shows that the risk of damage to our homes is an ever-increasing reality and we need to be prepared for it.' This sentiment is echoed by Martyn Foulds of Halifax Home Insurance in relation to the stormy weather that has swept the country in the last couple of months: ‘With the average claim for storm damage costing around £1,000, it is advisable for homeowners to take preventative steps to reduce the risk of damage to their homes, and also ensure they have adequate home insurance cover in place.' Article Source: http://www.ArticleBlast.com |
About The Author:
Mark is an author of several articles pertaining to Home Insurance. He is known for his expertise on the subject and on other Business and Finance related articles.
Mark is an author of several articles pertaining to Home Insurance. He is known for his expertise on the subject and on other Business and Finance related articles.
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