The UK has recently been battered by extreme weather. We’re still clearing up from the aftermath of Storms Eunice and Franklin, and Storm Gladys is now on its way. Insurance provider Paymentshield reports that the average insurance claim for storm damage has topped £1,000. So it’s more important than ever to check and compare home insurance policies, to avoid facing an unexpected bill.
Louise Pengelly, Paymentshield’s proposition director, advises homeowners on the “importance of having quality cover” so they don’t have to “pay out of their own pocket for storm repairs.”
So, will storm damage claims increase the general cost of home insurance for us all? And how do you go about comparing home insurance policies to cover storm damage?
Will home insurance premiums rise?
It’s been a tough few years for insurance providers due to the number of extreme weather events. The ABI reports that claims topped £360 million for Storms Ciara and Dennis in 2020. According to the BBC, flood claims alone cost an average of £32,000 per household.
While PwC estimates that a further £250 million will be paid out for Storm Arwen last November. Storms Eunice and Franklin are likely to increase this bill further.
Home insurers are also feeling the pinch on another front. Earlier this year, the FCA banned them from quoting higher prices for existing customers than new customers. This is likely to hit homeowners who saved money by comparing home insurance and switching to cheaper policies.
EY believes that home insurance premiums should “remain fairly flat over 2022” as the larger providers are “likely to sacrifice profit in the short term to protect their market share”.
However, this is unlikely to be sustainable in the long term, particularly given the high inflation rate. As a result, home insurance premiums are expected to rise.
What storm damage cover should you look for?
Most buildings and contents insurance policies cover storm damage, but there are a few important caveats to note:
- Definition of a ‘storm’: this varies by insurer. According to the ABI’s definition, a storm has wind speeds of at least 55mph (10 on the Beaufort Scale), torrential rain of 25mm in an hour, snow of 30cm in 24 hours or hail that damages hard surfaces.
- Damage to structures: your policy should cover significant damage to your house, such as broken roof tiles. However, not all insurers cover damage to outbuildings or outdoor items like garden furniture.
- Home maintenance: most insurers require you to keep your house in a good state of repair. They might reject a claim for roof damage from a storm, for example, if they deemed the roof to be in a poor state of repair.
The ‘devil is in the detail’ as far as cover for storm damage is concerned. So it’s worth taking the time to review the fine print to compare home insurance policies.
Should you claim on your policy?
It can be difficult to judge whether to claim for damage on your home insurance policy. A recent study by Which? showed that making a claim had a more significant impact on future home insurance costs compared to car insurance claims.
Which? found that home insurance customers with one recent claim paid £91 (57%) more on average than those with no claims. And making two claims increased the average quote by £198 (123%). This is due to the cost and complexity of home insurance claims.
Another thing to consider is the level of your excess. If your excess is £250 and you have £300 worth of damage, the increased premium is unlikely to make a claim worthwhile.
How can you save money on home insurance?
It’s possible to make significant savings by shopping around for your home insurance policy. One of our top-rated providers, Confused.com, estimates that 51% of home insurance customers could save over £150 on a combined policy.
We’ve produced a guide to our top-rated home insurance comparison websites. It could save you time and money when you’re looking to compare home insurance policies at your next renewal date. In the meantime, let’s hope that Storm Gladys is the last for a while.
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About the author
Jo is a writer specialising in personal finance and investments. She is a qualified Chartered Accountant, previously working in M&A at a UK investment bank and Arthur Andersen. Jo has written on a range of subjects, from in… Read More
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