What is the Insurance Industry definition of a storm?
The Association of British Insurers define a storm as being wind speeds with gusts of at least 48 knots (55mph) – equivalent to 10 on the Beaufort scale, torrential rainfall at a rate of at least 25mm an hour, snow to a depth of at least 1ft (30 cm) in 24 hours or hail of such intensity that it causes damage to hard surfaces or breaks glass.
Storms can cause extensive damage to private and commercial property, loss of utilities and services and exposure to liability and as brokers we see a variety of claims.
For personal homes claims such as structural damage, loss of refrigerated/frozen goods, for commercial premises in addition we see claims for loss of income and deterioration of stock and for landlords, loss of rental income.
In the immediate aftermath of a storm, every policyholder has a duty of care to undertake any measures to prevent further loss, examples of which may be the immediate tree surgery of precarious branches or remedial wall or fence repairs to secure loose structures.
Policyholders are authorised to undertake these measures without seeking permission, however it is always advisable to take images of the circumstances before any work is carried out and where possible obtain two repair estimates for the remedial works. If indoubt, speak to your broker who can advise the correct course of action.
A comprehensive Insurance policy will provide cover for most damage or loss sustained, however we have seen insurers remove some standard covers and provide them as optional extras instead, examples of these are freezer contents, garden furniture/ornaments and even boundary walls and fences. Our advice is to never assume cover is included and read your quotation schedule carefully before selecting your insurance cover, again if in doubt discuss with your broker.
In addition to property damage, Landlords are able to claim for loss of rent (where this cover is selected) in the event that storm damage has rendered a property uninhabitable, most policies will provide cover for either the loss of rental income itself or for alternative accommodation for the tenants enabling the continuation of rental payments. It is important to ensure accurate loss of rental income is declared and also consideration is given to the length of time this may be required for, 12 months is often selected but if damage is considerable it can take longer to repair or rebuild.
For businesses loss of earnings caused by business closure or loss of power or utilities can be substantial and occasionally difficult to claim for. Whilst physical damage to structure is evidential, loss of income is less tangible and tricky to calculate, for example a village shop owner who has no power may be able to remain open but sales may be dramatically reduced. Claiming for deterioration of refrigerated or frozen stock would be relatively easy to prove however the lower sales income less so. In these circumstances insurers will use your financial accounts and trading figures to ascertain the level of loss, for this reason it is of particular importance to provide your broker/insurer with an accurate revenue figure for business interruption cover, if found to be under-insured insurers reserve the right to apply a clause of average and only partially cover the loss.
Third party damage
In addition to the above, home and business owners may find themselves liable for damage sustained by third parties. If a tree within a property owners boundary or a rooftile were to fall causing damage to a vehicle or neighbouring property, it is widely believed that the property owner is liable for this damage, however this is not always the case. Infact, in order to be found liable the property owner must be proven to be negligent, for example if it is proven that the tree or roof in question is poorly maintained, again this is often difficult to prove and so the damaged must be claimed for under the third parties own insurance.
We are often asked whether it is worthwhile claiming and what impact claiming may have on future premiums. Insurance is put in place to protect against loss and therefore where you are able to claim, you should, however each circumstance is unique and the advice I give largely depends on two factors, the first being the excess payable and the second is previous claims history.
I would usually only recommend my clients claim if damage costs exceeds 100% of the policy excess, i.e if a policy carries a £250 storm excess I would only recommend submitting claims over £500. It is not unusual to see premiums increase by 50% at renewal following a claim, this can be mitigated by a broker undertaking a market exercise at renewal to obtain alternative rates, however this is often not possible if the claim made is considerable or where a client has a poor claims history as multiple claims are a red flag to most insurers.
The services of a broker can prove valuable in ensuring the correct cover at inception andin the unfortunate event of a loss, a broker is instructed by and acts on behalf of the policy holder providing impartial advice whether a claim can be made, should be made and how to go about making a claim.
A good broker will also assist with and monitor the claim until settlement, attending the claim site when required and liaising with loss adjusters and insurers on the policy holders behalf.
If you would like further details, please contact our main Switchboard on 01424 858190 or Peter Matthews – firstname.lastname@example.org – Mobile 07872 126644 and Anne Jones – email@example.com – Mobile 07394 564364