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Floods put insurance premiums ‘on the increase’

October 9, 2007 by admin  
Filed under News, News-Insurance

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Claims made due to extreme weather conditions this summer have pushed home insurance premiums up.

According to the AA’s British Insurance Premium Index, flood claims are blamed for a three per cent year-on-year rise in home buildings insurance which represents the biggest increase since 1994.

The flooding in July this year is estimated to have cost the insurance industry £3 billion, according the Association of British Insurers.

John Close, insurer relations director at AA Insurance, said: “Some predictions that premiums would rise by 15 per cent were overly pessimistic and, although I believe premiums will continue to rise as insurers dip into their reserves, I expect competitive pressure will keep increases affordable.”

He added that one advantage of the flooding was that people with no are realising that it is a necessity leading to “many insurers reporting increasing business”.

Furthermore, he advised, there are variation in prices and “deals to be done” when organising cover. He emphasised the importance of comparing cover charges before deciding on an insurer.

Tags: extreme weather conditions, Index, floods, Service industries, contents insurance, Types of insurance, Financial services

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