Flood cost estimates continue to rise

The Association of British Insurers (ABI) said today that an increased number of business claims, together with clearer information about the amount of damage to many homes, had caused it to up its initial estimate of £1 billion worth of damage.

Yesterday, the UK's biggest insurance firm Aviva, which owns Norwich Union, warned it faced a £175 million bill for flood damage. It added that the bill could rise even further if the current bad weather - classed as a one-in-150 year event by the Environment Agency - continued.

The ABI said that overall, the insurance industry was now "well advanced" in assessing the damage. Clean up operations were underway and work had started to dry out properties and begin repairs.

Stephen Haddrill, the ABI’s director general, commented: "Insurers continue to work flat out to help customers in these difficult times.

"Families, elderly customers, those with health difficulties and getting businesses back to work are our priority. And we will be talking to our customers about how we can help them avoid the trauma of a similar event in future, for example through using more flood-proof building techniques."

Rainfall records

He added that the majority of properties had now been visited and that insurers expected to have completed this initial process by early next week.

"The insurance industry has mobilised staff and contractors from around the country to meet the enormous challenge the widespread flooding has brought," he said. "We are working with the Government and local authorities to put families, businesses and communities back to normal as quickly as possible."

Provisional statistics from the Met Office this week revealed that the month of June was the wettest since records began in 1914.

The UK-wide average figure of 134.5 mm had beaten the previous highest June total of 121.2 mm in 1980. Records for England and Northern Ireland had also been broken.

Surprisingly, despite the large amounts of rain across many parts of the country, the average UK temperature was above the long-term average in June, with a mean temperature of 13.7C - the long term average is 12.6C. In fact, the last time were below average was in March 2006.

Third party help?

Meanwhile, victims of the recent floods have been urged to think carefully before hiring third parties to help them with their insurance claims.

City watchdog the Financial Services Authority (FSA) said it had received reports that people whose homes were flooded were being approached by claims management companies, which often charged a percentage of any claim paid out as their fee.

The regulator urged people who decided to use a claims management firm to make sure they were either regulated by the FSA or were listed as an "exempt professional firm".

FSA spokesman Robin Gordon-Walker said: "Your insurer will handle your claim and they are obliged under our rules to handle it fairly. Think carefully about whether you need third party help at all, as they will take a slice of your claim. If you do decide to use them, make sure you know how much it will cost you."

Details of firms registered by the FSA and of exempt professional firms can be found on the FSA's website - see link above/right - under the FSA Register section.