Author: Staff
Source: Insurance Age | 01 Dec 2009
Categories: Insurer, Commercial
Tags: ABI | Flooding | Risk Management
"The hard work still to come" - Nick Starling
The cost of the recent flood claims in Cumbria and southern Scotland is around £100m based on current claims, the Association of British Insurers (ABI) has estimated.
However, the ABI warned that this may increase if more complex, commercial claims, such as those for business interruption, were made.
Loss adjuster Cunningham Lindsey said the four days of flooding resulted in 1,000 claims with 25% of these being in the Carlisle postcode area.
In total 1,300 properties were affected. According to GAB Robins, 52% of the total claims were made in Cockermouth, where 500 properties were damaged.
Risk Management Solutions (RMS) has estimated that if all claims were residential, the loss range would be between £45-60m. However, if 75% of the claims were residential and 25% commercial then it would rise to £80-105m.
"The main determinant of loss will be the number of commercial properties affected, as commercial damage tends to be far more costly and business interruption coverage can kick in," said Dr Claire Souch, vice president of product management at RMS.
Nick Starling, the ABI's director of general insurance and health, said: "Once flood waters have receded and the damage to homes and businesses is assessed, the hard work begins."
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Reducing the cost of the clear up in Cumbria
Insurance companies need to look at ways of reducing the cost of getting homes and businesses back to normal. One of the biggest costs is drying out affected properties - it can cost up to £30,000 per property once you factor in the cost of hiring the equipment and the energy being used to run the blowers. Not only is this method expensive, it is also bad for the environment and the carbon footprint for this activity is immense. Not only that, this traditional method is noisy and slow and it is near impossible for a business to operate in the property of a family to live in their home while the fans are running. Another drying method is proving much more effective - Direct Air Dryers can dry a property in 21 days. The noise is much less and the electricity consumed is also greatly reduced. New methods, of course, will not be welcomed by some flood restoration companies as their profits will be reduced. What is most important, however, is getting families back in their homes as quickly as possible to they can resume normal lives.
Suzi Christie
03 December 2009
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