Consumers are grappling with the looming reality of surging home insurance expenses, propelled by the escalating frequency of flooding and other extreme weather events, resulting in a significant uptick in premiums. According to consultants Pearson Ham, the cost of comprehensive home coverage, encompassing both buildings and contents, experienced a staggering 40% surge last year compared to 2022.
Stephen Kennedy, Director at Pearson Ham, attributes the substantial increases to unexpected and extreme weather events, emphasizing that these trends are expected to persist for the foreseeable future. With Storm Henk wreaking havoc in the UK last week, accompanied by over 100 weather warnings and widespread flooding, concerns about rising premiums have intensified. Storm Henk follows a series of extreme weather events, including storms Babet, Ciaran, and Debi in the previous year.
Campaigners for the affected population highlight the common issue of underinsured homes, potentially leading to inadequate coverage for claims. After the storms in October and November, insurers paid out a substantial £352 million for damaged homes, as reported by the Association of British Insurers (ABI).
The average cost of a combined homes and buildings insurance policy stands at £350, according to ABI figures. Even in the first week of the current month, premiums surged by 1.5%, a trend predicted to persist for the coming months, according to Stephen Kennedy.
Insurance companies now face a dual challenge as repair costs escalate due to labor shortages and rising materials expenses. Chelsea Shakespeare of brokers Adrian Flux notes that the combination of flooding, drought, and storm damage has led to increased payouts, inevitably contributing to higher premiums.
The ABI, when approached for comment on prospective price hikes, declined, asserting that such decisions are at the discretion of individual insurers.
In tandem with rising flood incidents, excesses – the homeowner’s contribution to a claim – have also increased across all premiums, with some reaching several thousand pounds. In high-risk areas, cover removal has become more prevalent, warns Chelsea Shakespeare.
Heather Shepherd from the National Flood Forum highlights the pervasive issue of underinsurance when assessing damage, citing the lack of a bespoke process in obtaining home insurance.
Price comparison website Confused.com underscores the potential financial ramifications, with average flooding claims reaching £48,551 for buildings and £11,489 for contents. Therefore, thorough scrutiny of policy documents is urged to ensure comprehensive coverage.
Protection against adverse weather conditions is standard in most home insurance policies, according to the ABI, with coverage details varying by provider. Emma Myrie from specialist home insurer Homeprotect emphasizes the consequences of dishonest risk assessment, potentially leading to coverage withdrawal.
To mitigate rising insurance costs, the Environment Agency’s website offers property risk assessments, and those in high-risk flood areas may access subsidized insurance through Flood Re, a government scheme.
Homeowners can take preventative measures, such as fitting covers for air bricks, installing flood gates, and implementing drainage improvements, to potentially secure better insurance terms, notes Emma Myrie. The Property Care Association suggests additional steps, including fitting return valves to drains and applying water-resistant solutions to brickwork.
According to the ABI, proper property drainage, incorporating sustainable methods, can aid in absorbing heavy rainfall and reducing flood risk, says Louise Clark of the ABI.
