No Bailing Out

Summary
It is important to make sure you have adequate insurance cover, especially is you live in an area that is at high risk of flooding. Customers who try to buy insurance at the last minute will be refused cover or have claims rejected. Insurance is all about covering for something that may happen, not something that is already happening.

Tips On How To Arrange Cheaper Home Contents And Buildings Insurance: Some sure fire ways of reducing the cost of home insurance.
UK House Insurance. The Risk of Under-insurance: The internet has shaken up the market for home insurance. But make sure youre fully insured and be realistic
A Basic Guide To Home Contents Insurance: This argues you should always have your contents insured.
It's Getting More Difficult To Claim On Home Insurance: Make sure your home has all the necessary security measures required by your insurance company in the event that you are burgled and need to make a claim. Buy extra locks for windows and doors if you need to and consider fitting an alarm.
Insurers Give Out Warning Following Met Chief's Burglary Comments: In the wake of comments from the Metropolitan police chief which suggested that it was safe to leave windows open and doors unlocked, insurance companies issued the opposite advice. Furthermore they stipulated that policyholders who did this would almost certainly not be covered in the event of a claim.

Life Insurance News

During the floods last summer people were desperately trying to purchase contents insurance on line and over the phone as water washed through their houses, say insurance companies.

Insurers needed to go to the Financial Ombudsman Service for advice after customers who took out insurance during the floods disputed the rejection of their claim which followed.

Norwich Union confirmed that it has experienced telephone calls from people who were knee deep in water pleading to buy insurance.

'We think these stories have accounted for some of the cases that have been reported of people saying they cannot get insurance in their area,' says a spokesman. Insurance is still offered in those areas that are affected but not when people are actually in a flood situation.

Insurance companies wading through unprecedented numbers of claims are currently having to scrutinize policies taken out at the eleventh hour to check that they are valid.

Malcom Tarling, spokesman for the Association of British Insurers says 'No company would offer cover for something already happening'. After all, insurance means covering for something that may happen in the future. Privilege, Churchill and Direct Line - all part of the Royal Bank of Scotland group - have more clients in the flooded regions than any other company. The problem of flooded households trying to purchase last-minute insurance was addressed quickly by the group who immediately enforced a temporary ban on selling insurance to those postcodes where the flooding was located. This ban has now been lifted.

A Direct Line spokesman confirmed that there was a temporary rise in people wanting to take out insurance during and directly after the floods and the company was keen to prevent this because customers would not be able to claim for damage which had already happened.

Around 25% of people in Britain do not possess home contents insurance, according to the ABI. Hull City Council says this figure is probably higher in many of its postcode districts. Furthermore, Abbey estimates that around 257,000 claims a year are refused because of inadequate insurance cover.

Meanwhile, loss assessors, also known as claims management companies, are targeting homeowners in flood hit areas, promising to undertake the insurance claim on their behalf, in return for a fee.

Morgan Clark, which says it is the UK's number one flood claims expert, is running an internet advertising campaign and mail-shotting customers in flood-affected areas in a bid to get them to use its service. In just one day after the floods 900 people visited its website, the company claims.

Philip Morgan, director of Morgan Clark, says his company takes care of everything. They charge between 4.5 and 10 per cent of the eventual claim that a householder receives. He maintains that the insurance industry is at risk of burning out and when the loss adjusters have all gone, in a few weeks time; people will be left to pick up the pieces.

Stephen Reid of Salmon Assessors agrees that people should not be dissuaded by the fee it charges, usually 10 per cent of a claim. 'The most important thing we can alleviate is stress,' he says. 'You wouldn't deal with a court of law without a barrister and you wouldn't deal with the Revenue without an accountant. We're no different. It's all about presentation and getting the right documents together.'

Today, claims management companies must be registered with the Financial Services Authority and you should check this if you are thinking of using one of these companies. The Financial Ombudsman Service advises householders to approach such companies with caution because any proportion of the claim value that has to be given away in fees to these companies means the policyholder will not be able to replace everything that has been lost.

A spokesman said that surveys undertaken by itself, the ABI and Which? [the consumer organisation] have revealed that claims management companies do not recoup any more money for the customer. If there is a problem with a claim The Financial Ombudsman Service would much prefer to hear from individuals directly.