Following the recent storms, many people claiming on their home insurance policy are finding they are not as protected as they thought. This may help to explain why.
With back-to-back storms battering the UK recently, insurers are facing a nine-figure clean-up bill, with an average claim estimated at £3,500. However, many claims will be significantly higher, running to tens or even hundreds of thousands of pounds.
In terms of pure financial cost, most homeowners will expect their personal exposure to be limited to their insurance policy excess. Some, though, will not be as fortunate.
What is an insurance policy excess?
An insurance policy excess is an amount (if any) you must contribute if you make a claim on your policy. It reflects you accepting a small proportion of the risk. From the insurance company’s point of view, an excess discourages you from making small claims, but in so doing, helps reduce the policy premium.
Whether the policy covers buildings, contents, or both, it will probably include more than one policy excess. This is because home insurance policies cover a number of distinct risks bundled together, some of which will be optional extras selected by you. Common examples of risks that stand alone within the policy are bicycles, frozen food, trees and plants, and cash. Each of them is likely to carry its own excess.
Many policies allow you to adjust the amount of your excess(es) when taking out the policy. Reducing an excess will raise your policy premium and vice versa.
Level of insurance cover
Many people with home insurance policies are underinsured. For buildings insurance, this is not so much of a problem these days as the level of reinstatement cover is often either unlimited or sufficiently high; £1 million is not uncommon.
However, particular care should always be taken when choosing the level of cover required for your possessions. Valuables (including jewellery) and bicycles are common examples of risks that people underinsure. Also, it’s wise to check your policy carefully. You may wrongly assume that certain items are covered when in fact they are specifically excluded.
Reducing your level of cover will reduce your policy premium, which can be tempting – until of course you need to make a claim. In addition to the level of cover, a variety of factors affect the amount of your premium, including the nature or location of your property and your claims history.
If you rent your home, you will not usually be responsible for buildings insurance, which is a matter for your landlord. However, around one in three adults do not have contents insurance, meaning they are completely uninsured for their possessions. Evidence suggests that more tenants than homeowners are without contents cover, some mistakenly believing they are covered under their landlord’s policy.
Cars damaged in a storm
Storms frequently cause damage to cars. Comprehensive car insurance policies should cover storm damage, but your no claims discount may be affected if it’s not protected. Also, ensure you have windscreen cover. If you have third-party cover only, damage to your car will not be covered unless you can prove the damage was the fault of somebody else and make a claim against them. For example, perhaps a roof tile from your neighbour’s poorly maintained roof fell onto your car.
Does my home insurance cover me for storm damage?
Although most home insurance policies offer some level of weather and storm damage cover, there are some exclusions to be aware of. A good example is damage caused to fences, gates and hedges. This is not typically covered, unless, for example, a tree branch has fallen and damaged a fence.
You should also be aware that it can be difficult to prove the damage was caused by a storm. This is because when it comes to insurance, storms must fall within a certain definition to be treated as such. Some insurers use local weather data to assess the conditions at the time the damage was caused.
The Beaufort Scale is a measure for describing the intensity of the wind. A wind speed of between 47 and 54 miles per hour is categorised as force 9 (“strong/severe gale”). According to the scale, at this intensity, you might expect “slight structural damage (chimney pots and slates removed)”. However, the Association of British Insurers (ABI) do not consider it a storm unless the wind speed reaches 55 miles an hour (the threshold for force 10). At that speed, the scale says we can expect “trees uprooted and considerable structural damage”. In addition to wind speed, the ABI also define a storm as:
- Torrential rainfall at a rate of at least 25mm per hour; or
- Snow to a depth of at least one foot (30 cm) in 24 hours; or
- Hail of such intensity that it causes damage to hard surfaces or breaks glass.
But not all insurers stick rigidly to these definitions. Some will consider the damage caused in less severe conditions, particularly if the property is isolated. You may even be fortunate and find that your insurer is prepared to consider your individual circumstances.
If your policy does not cover accidental damage, the policy is unlikely to protect you if, for example, a tree branch falls on your house a week after a storm. This is because although the storm may have weakened the branch, it may not necessarily have caused it to fall.
It’s not unusual for claims to be rejected if the insurer believes a policyholder has failed to properly maintain their property to avoid “wear and tear”. For example, if slates have fallen but the insurer believes their condition meant they should have been repaired before the storm, they may either reject the claim or offer a reduced amount.
Taking all of this into consideration, it’s understandable that the Financial Ombudsman is often called upon to arbitrate in disputes.
What can I claim for storm damage?
If your claim is accepted, the insurer should cover the cost of any necessary repairs, with urgent work prioritised to prevent further damage or to make the property safe. After any urgent work, the insurer and surveyor will agree on a schedule of works, with an approximate timetable.
If the damage means your home is uninhabitable, most reputable policies cover alternative accommodation, initially in a hotel, and then in a longer-term let if rectification works will be protracted. They should also pay storage costs for your belongings.
With possessions, expect a request for evidence of both the extent of the damage and the item’s value. Thereafter, be prepared to negotiate!