INSURANCE ADVICE

Following the recent floods have you been approached by someone offering to help you fill out your insurance claim?
Before accepting such an offer you should know that:

• You can make a claim directly and free of charge from your insurer
• A third party may take a cut of any payout
• If you choose to accept help from a third party check they are regulated by the Financial Services Authority or are an exempt professional firm such as a law firm.
• Free, independent advice is available from your local Citizen's Advice Service - www.gloucestercab.org.uk/

This note is designed to give advice to those households in flood damaged areas who are intending to claim on their insurance policies and to let you know that you can make a claim directly and free of charge to your insurer.  Insurers are regulated by the Financial Services Authority (FSA) and they have to handle your claim fairly.

Following the recent flooding you may be approached by individuals or companies who offer you help in progressing your insurance claims (for example, by offering to notify your claim to the insurer or to negotiate it on your behalf).
Recent advice from the FSA, endorsed by the Association of British Insurers (ABI) recommends that you think carefully about whether you want to hire a third party's help.

The ABI have reported that "the insurance industry has mobilised staff and contractors from around the country to meet the enormous challenge the widespread flooding has brought. We are working with the Government and local authorities to put families, businesses and communities back to normal as quickly as possible."

If however you do decide you want to hire a third party to help you progress your insurance claim, make sure you check how much it will cost you first as they may charge a share of any sum paid out by the insurer.  This may leave you short of the money you will need to repair damage and replace possessions.

Before accepting the help of individuals or companies who will expect payment in return for their service you should also check that they are regulated by the Financial Services Authority (see their Register at www.fsa.gov.uk/register/home.do) or are an exempt professional firm such as a law firm (see the Exempt Professional Firm (EPR) section of the FSA Register).

Where to go for help

National Advice

The Financial Services Authority (FSA) is an independent body that regulates the financial services industry in the UK. As well as regulating most types of financial services firms, one of their main aims is to protect customers of financial services, including insurance.

The Financial Services Consumer Contact Centre can answer general enquiries about financial products and services. They can also tell you if a firm is authorised and point you in the right direction if you don't know who to contact.

You can contact them by calling their Consumer Helpline (call rates may vary):

• 0845 606 1234
• Minicom/textphone - 0845 730 0104
  Opening hours are between 8am and 6pm Monday to Friday.

The Association of British Insurers (ABI) www.abi.org.uk/ has a useful list of questions and answers about flooding and insurance on their website.

Local Advice

Free, independent and confidential advice on financial matters such as progressing insurance claims is available from your local Citizen's Advice service. Advice is available face-to-face and by telephone.

To find your local Citizens Advice Bureau and to get details such as opening times, phone numbers, information about access to the bureau and other languages available in addition to English go to www.citizensadvice.org.uk/index/getadvice.htm or phone 020 7833 2181.

Gloucester and District Citizens Advice Bureau - 75 - 81 Eastgate Street - Gloucester - GL1 1PN
Telephone: 01452   527202
Web: www.gloucestercab.org.uk

Useful Sources of Information

For factsheets on insurance
ABI Information Zone - www.abi.org.uk

For insurance guides and Find a Broker service
British Insurance Brokers Association (BIBA) - www.biba.org.uk
Consumer Helpline - 0901 814 0015

Useful Sources of Information (continued)
For an insurance broker who is an IIB member The Institute of Insurance Brokers (IIB) - www.iib-uk.com

For guidance on making a claim for compensation
The Claiming Compensation guidance leaflet - www.advicenow.org.uk/compensation/

OR Dedicated Claims Regulation site - www.claimsregulation.gov.uk/publications.aspx
Dedicated telephone number - 0845 4506858.

INSURANCE, WEATHER AND EARTHQUAKE DAMAGE:  KEY POINTS FOR LOCAL AUTHORITIES

The following notes summarise cover normally included in standard policies and are provided as a general source of advice to be drawn on by local authorities following a severe weather event or an earthquake.  However customers should ALWAYS check the details of their own policies since Property insurance operates in a highly competitive market and offers a range of products to suit different needs, from low cost policies to high service level policies.  Some details will vary accordingly.

Insurance coverage

• 93% of all homeowners have Home Buildings insurance in place, although this falls to 85% of the poorest 10% of households owning their own home.  This insurance is a standard condition of a mortgage.
• 75% of all households have Home Contents insurance in place.
• Half of the poorest 10% of households do not have Home Contents insurance.

Many local authorities and RSLs offer low cost Home Contents insurance via Insurance with Rent schemes to their tenants.  Similar affordable cover is available via Credit Unions, Trades Unions and certain charities such as Help the Aged and Age Concern.

Two Flood Relief Funds are available to help victims of the recent flooding in Gloucester:

• Gloucestershire Flood Relief Fund
• District Flood Relief Fund

General

The actions to be taken immediately following an event are:

• Make sure people are safe first, treat injuries, evacuate unsafe areas.
• Check the property is safe.  Speak to your insurer or broker as soon as possible giving as much information as you can.  Arrange for stabilisation/demolition of unsafe structures, taking advice from your insurer on how best to handle this - they may have preferred contractors/suppliers who will undertake the work.
• Secure your property against crime and weather as early as possible - check whether your insurer will arrange this or whether you need to take action and claim back any costs.

For households:

• If you are unable to stay in your severely damaged property overnight, speak to your insurer as soon as possible about arranging alternative accommodation.

For businesses:

• Do as much as you can to minimise business losses.  Remember you can lose customers just because they assume something is worse than it is, but this type of trade loss is not covered by insurance.

Insurers expect to respond with loss adjustors on the ground within hours of an incident and will often attempt to make contact pro-actively with customers in affected postcodes if they have not heard anything within 24 hours.  A complete list of ABI members is available on our website www.abi.org.uk together with information on insurance coverage and what to do when making a claim.

Homeowners and householders

• Storm damage (which includes tornado) and damage caused by earthquake are standard features of Home Buildings and Home Contents insurance.  These covers may be bought under a single policy or separately.  Tenants only need purchase Home Contents insurance.
• Home Buildings insurance covers:
  • Immediate repairs to buildings to make them safe and secure;
  • Where necessary, demolition, site clearance and re-building;
  • Repair of building and replacement of fittings (eg bathroom suites, fitted kitchens) which have been damaged;
  • Alternative accommodation, up to a set proportion of the sum insured (check policy for details but typically 15-20% of total sum insured) while repairs are being undertaken if the level of damage is such that you cannot occupy your property.
• Home Contents insurance covers:
  • Repair or replacement of furniture and possessions damaged by the weather event or earthquake;
  • Replacement of possessions stolen whilst the property was insecure provided that all reasonable steps were taken to secure the property at the earliest possible time;
  • Alternative accommodation, up to a set proportion of the sum insured (check policy for details but typically 15-20% of total sum insured) if the address on the policy cannot be occupied.

Landlords

• Storm damage (which includes tornado) and damage caused by earthquake are standard features of Landlord's insurance policies - any specific exclusions will have been notified to the policyholder as part of the policy documentation.
• Landlord's insurance typically covers:
  • Immediate repairs to buildings to make them safe and secure;
  • Where necessary, demolition, site clearance and re-building;
  • Repair of building and replacement of fittings (eg bathroom suites, fitted kitchens) which have been damaged;
  • Repair or replacement of landlord's furniture and contents damaged by the weather event or earthquake;
  • If option purchased: Alternative accommodation, up to a set proportion of the sum insured (check policy for details but typically 15-20% of total sum insured) while repairs are being undertaken if the level of damage is such that you and/or your tenant cannot occupy your property;
  • If option purchased:  Loss of rent during repairs if the property is unoccupiable, up to a similar amount.

Businesses

• Storm damage (which includes tornado) and damage caused by earthquake are standard covers in business policies - any specific exclusions will have been notified to the policyholder as part of the policy documentation.
• If a business has suffered storm damage or damage caused by earthquake this will also trigger the business interruption cover where appropriate.  Standard package policies for eg SMEs will normally include business interruption.  Tailored policies will include this where the customer has asked for cover.
• If the business premises are not themselves damaged but access to the business is denied by the authorities for eg public safety reasons some policies will also respond to cover loss of profits/business interruption.  Businesses should check their policies to see if they have this cover in place.
• Loss of trade solely due to people being put off coming to the area or because they think it isn't open to business is not covered by business interruption, so let customers know you are open for business as soon as possible.

Association of British Insurers
April 2007

Last Updated: 16/08/07