Q&A: Insurance and storm damage

After recent storms left thousands of people homeless and many more with damaged property, Malcolm Tarling of the Association of British Insurers answers some important insurance questions.

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Q: Many people have been forced into temporary accommodation after their homes were flooded. Will insurance companies foot the bill?

"Most policies now will cover the cost of alternative accommodation, up to a maximum percentage of a sum insured, and if people cannot afford to pay that, insurance companies will step in and pay."

Q: But people have complained of busy helplines. Can they just go and get accommodation and then ask the insurance company for the money?

"The first thing people should do is to check on the policy to make sure they have got the cover for alternative accommodation.

"If they have, they should go ahead, and insurance companies will do everything they can to pay those costs.

"But if you cannot get through to your insurance company you should keep trying because companies have been drafting in extra staff to man emergency helplines.

"Obviously they are getting a large volume of calls and they want to deal with those calls as quickly as they can."

"Insurers are pulling out all the stops to make sure that people get money as soon as possible."

Q: If your home was flooded, do you have to move everything out to protect it from further damage, or indeed theft?

"Insurance companies ideally like you to keep as much damaged property as you possibly can so that it can be inspected.

"But they do not expect you to keep property that is a health hazard such as food. You need to dispose of that as quickly as possible.

"Loss adjusters and claims inspectors all this week have been at the scene around Carlisle and other affected areas advising people what to do."

Q: But you may not be able to remove all the contents the upper floors of your house. What if it is stolen?

"Well, insurers are going to be pragmatic here. Unfortunately, there is going to be the risk of theft in some isolated cases, and I think insurance companies will take that into account."

Q: And when these problems have been sorted out, will insurance companies be prepared to insure all these houses again?

"There is no reason why you will not be able to get insurance if you suffered a flood claim. One event in itself should not affect premiums for people paying across the board.

"The vast majority of properties that are vulnerable to flooding in this country can be insured.

"The only properties insurers have to look at on a case-by-case basis are going to be those where there are little or no flood defences in place."

Q: Is the industry generally worried about the growing number of these severe weather events?

"The insurance industry is concerned that that there is going to be a 50% increase in the number of winter depressions across the UK.

"Those depressions commonly bring with them bad weather, heavy rain and strong winds. And they all impact on insurance costs of course.

"What we want to see is good management of the impact of climate change.

"If we have that, then there is no reason why insurance cannot continue to be freely available at a price that as many people as possible can afford."

BBC Radio 4's Money Box was broadcast on Saturday, 15 January, 2005, at 1204 GMT.

The programme was repeated on Sunday, 16 January, 2005, at 2102 GMT.