Complaints to the Financial Ombudsman Service (FOS) have increased by a third in the previous 12 months. The complaints relate to the way insurance companies have dealt with weather related claims.
Providers have been hit with claims worth billions of pounds due to flooding, an earthquake and severe gales. The industry's bills came to 3 billion pounds for the floods, 30 million pounds for the earthquake and 350 million pounds for the gales.
The building insurance industry has always been stable. The FOS saw no increase in disputes in the two financial years to April 2007. That figure has risen by 32 percent since then. 'The biggest issue we are seeing in relation to storms is problems with repairs, rather than the whole claim being refused,' said a spokeswoman for the FOS.
Talking of the way insurance companies were dealing with their customers, in the aftermath of the Hull floods, one expert said to The Observer it was 'Nothing short of disgusting'. Paul Hendy, who works for Hull City Council said he believed it was some of the biggest insurers who were the worst offenders for carrying out work on the damaged homes 'There is no consistency between insurance companies; the best ones do a thorough job, while the worst ones skimp on everything,' he said.
Talking about the increase in complaints a FOS spokeswoman says. 'Much of the increase in cases may be attributable to the fact that insurers now take responsibility for more stages of the process, so rather than writing a cheque for the amount of damage, they will appoint companies to undertake repairs,' said the FOS spokeswoman.
Following the Carlisle floods in 2005 an independents reports author said. 'Many people felt that they [the insurance companies] aggravated an already difficult situation'. 'The main complaints against companies were delays in dealing with claims, attitudes of loss adjusters, not providing full information on what they could claim, unequal treatment by different companies, the way furniture had to be bought and the selection of building contractors.'
However, the problems do not stop there. Some homeowners found they did not have adequate levels of cover. Buildings insurance covers the cost to rebuild the property but this can change due to extensions and rising costs of building materials. .
Graeme Trudgill of the British Insurance Brokers' Association says. 'You need to think about whether you have the right amount of protection. The easiest way is to get your broker to work this out for you or to go on to the Association of British Insurers website, which has a calculator to do this for you,'
Sainsbury's and the Halifax offer unlimited buildings cover. Trudgill warns though that people could pay for more cover that what they need. 'Working out the build cost of your property means your quote will be tailored to that amount, which could save you money,' he said.
Insurers normally cover costs of approximately 20 to 25 percent of the insured value of your home (not the market value) if you need to move into alternative accommodation. Some insurers cover up to a specific sum, usually 20 to 25 thousand pounds.
However people who are claim for storm damage can expect an increase in future premiums.