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Last Updated: Friday, 8 December 2006, 11:46 GMT
Claiming for the tornado damage
By Ian Pollock
Personal finance reporter, BBC News

Tornado damage in Kensal Rise
Some houses may need to demolished
A large minority of householders in Kensal Rise in North West London may find they are underinsured for damage caused by Thursday's tornado.

The government's regular Family Expenditure Survey shows that one in four householders in London does not have contents insurance for their homes.

So some of the 100 or so families whose houses have been damaged may find they have to pay out of their own pockets to replace carpets, curtains and furniture that have been damaged or destroyed.

Underinsurance for the buildings themselves is much rarer, though, and most householders are likely to have this in place.

For a start, mortgage lenders usually make it compulsory to have building insurance as part of the mortgage deal.

Buildings and contents

What is the difference between the two types of policy?

Malcolm Tarling of the Association of British Insurers says the distinction is quite simple.

"The rule of thumb is that if you could turn a house upside down and shake it, anything that fell out would be covered by the contents policy.

"Buildings insurance will cover the bricks and mortar - contents insurance will cover what is inside," he said.

That means that paying for replacement baths, central heating boilers, wiring and plumbing would come under the building insurance.

Typically, building insurance in the UK will not mention tornados directly, but they do come firmly under the heading of storm damage, which is a standard feature of any cover.

Alternative accommodation

Choosing a new suite of furniture may not be a top priority for some householders yet.

Tornado damage in Kensal Rise
What is building damage and what is content damage?
Some have found their houses are so badly damaged they are now uninhabitable and might even have to be pulled down.

They will be out of their homes until surveyors have calculated the full extent of the damage and the repair work that needs to be carried out.

What can they do?

Andrew Lowe from the insurance firm Direct Line said: "It's quite normal for a home insurance policy to include payments for alternative accommodation.

"Obviously the policies do vary in terms of the amount of money the insurance company will pay out."

But Malcolm Tarling points out that there may be limits.

"Most will cover the cost of alternative accommodation up to a specified limit, eg 20% of the total sum insured."

So the cost of staying in a bed and breakfast for a few days, or renting a home for a few weeks or months, is covered but will not be unlimited.

Cars

Quite a few cars have been badly damaged by the bricks, tiles and trees thrown around by the tornado.

Tornado damage in Kensal Rise
Comprehensive cover will be needed for car claims

Car owners whose cover is comprehensive will be able to make a claim on their policy.

But anyone who had only a third-party, fire and theft policy - or none at all - is going to be out of luck.

Theoretically, a car owner might be able to claim on the neighbours' buildings policy if the car damage was clearly caused by material from their home.

But proving that a specific neighbour was both liable for the damage and negligent as well would probably be very difficult.

If the experience of residents of Kings Heath in Birmingham is anything to go by, it may take a long time for some people in Kensal Rise to get their homes back to normal.

Similar damage was caused in Birmingham by a tornado in July last year.

But some victims were able to return only after a wait of nearly 12 months.




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