Potential £100m claims as floods hit UK

Insurers face paying out up to £100m in claims from last week’s floods, which devastated parts of northern England, the ABI said.

The ABI estimates damage at between £50m and £100m, based on the current tally of around 1,000 claims. The total damage is not expected to come close to the £3bn paid out by insurers for the 2007 floods, however.

Hundreds of people were rescued by emergency services in Cumbria, one of the worst hit areas, on Friday after heavy rainfall. The Environment Agency described it as a “once in a thousand years” flood.

Both insurers and loss adjusters are stepping up their operations to deal with the crisis.

Loss adjuster Crawford & Company has fully mobilised its adjusters, surveyors and repair networks. Its claims call centre has extended its hours and teams have been put in place for the weekend.

Direct Line has also taken on extra call centre staff and sent out property insurance advisers to help cope with repairs and authorise alternative accommodation.

Meanwhile, loss adjuster QuestGates warned that insurers must address environmental damage from the floods. Dangers included swept-away oil storage tanks spilling into the floods, overflow from sewage mixing into the floodwater and mould caused by residual damp.

QuestGates said there was a significant chance of E. coli remaining in properties affected by the flood water.

QuestGates environmental head Alan Dobson said: “The potential implications of the environmental damage caused by flooding are often overlooked at this early stage. General loss adjusters will already be on the scene in places such as Cockermouth assessing the damage, but unless measures are taken to properly assess and manage the environmental aspects of the reinstatement, the eventual costs, not to mention the risk to public health, could be substantial.”

The floods happened the day after the government published details of the Flood and Water Management Bill in the Queen's Speech. Labour faces a battle against time to pass the bill before next year's general election.

The bill is seen by insurers as a key development in improving flood prevention and management.

ABI director of general insurance and health Nick Starling said: “One in six homes in England is at risk of flooding, and this bill will be welcomed by anyone who has to live with the threat of being flooded. The bill should form the basis of an overhaul of how we can better manage and adequately fund the rising flood risk.

“As well as providing reassurance to those at risk of flooding, this will ensure that flood insurance remains widely available. Improvements in managing flood risk are urgently needed, and we urge the political parties to work together to ensure that the bill becomes an Act as quickly as possible.”