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Property insurance premiums rocketing due to UK storm damage

With back-t0-back storms in Isha and Joceyln set to be followed by a sudden temperature rise leading to more unsettled weather, skies are darkening for policy providers and homeowners. 

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Joceyln is the third named storm of 2024, and the second amber Met Office storm warning in one week.

The insurance industry has already warned of a likelihood that premiums will rise in the coming months as costs are counted. Last year, in the wake of storms Babet, Ciaran, and Debi, the Association of British Insurers [ABI] estimated the price of damages was around £560 million.

More than 50% of that related to battered homes, £155million for businesses, and £53million for vehicles. In total, there were almost 50,000 individual claims resulting from this trio of extreme weather events, with £5million issued in emergency payments to help customers in the immediate aftermath, including temporary accommodation for almost 1,500 families.

Overall, the damages were up on the £497million paid out for three storms the previous winter, in February 2022, when Dudley, Eunice, and Franklin struck one after the other. However, it is roughly comparable to the cost left behind by Ciara, Dennis, and Jorge in February 2020, and significantly less than 2015’s Desmond, Eva, and Frank storms – the strongest and most expensive of the past decade. 

‘The government also has a role to play by ensuring that the planning system discourages building in flood vulnerable areas. We also need building regulations that make our homes more resilient to climate change challenges like floods and storms,’ said Louise Clark, ABI’s Policy Advisor, Property Insurance.

A new report by DBRS Morning Star reveals the UK has been among the European countries worst affected by storms in 2024, with heavy rains and strong winds beginning on Tuesday 2nd January as storm Henk ensued. England recorded 40mm of rain in a 24-hour period, in some cases leading to flooding of the same properties that have already been recorded as storm damaged three previous times this winter. 

The analysis goes on to show that up to and including Henk, the total cost of storm damage to the UK insurance sector could be £700million. Crucially, though, this does not take into account the most recent weather events, which may not be the last of the season. The report does point out there is no concern about whether claims can be covered, but paints a stark picture of what this means for policies going forward. 

As per Ernst & Young data from October last year, Britain’s home insurance premiums are expected to have risen 17% in 2023, and predictions point to a further 16% hike before January 2025. Although not directly connected, high inflation and supply chain disruptions are also likely to have caused a 25% spike in the cost of motor vehicle insurance last year, and a further 10% rise by December this year, creating an additional financial strain at a point in time when many households can ill afford it. 

More on climate and economics:

Resilico: the flood defence app regulating mitigation, insurance and recovery

COP28 registers early win with climate disaster fund

Property flood resilience guide goes live

Image: Paul Zoetemeijer

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