Home Insurance Will be a Struggle for Natural Disaster Victims

Gerry Tyack is no stranger to a challenge. He served with the Royal Air Force in the Second World War, having lied about his age to join up as a 16-year-old in 1939. After working as a fitter on Wellington bombers, he joined a mobile radar unit driving deep into Germany to pinpoint bomber targets.

More recently, Gerry combined a career as a garage owner with a weekend passion for motor racing. In the Sixties and Seventies he set international hill-climb and sprint records in a series of Porsche, BMW and Brabham cars.

But Gerry's latest challenge has been coping with the aftermath of last summer's flooding. His Cotswold stone home in the town of Moreton-in-Marsh, Gloucestershire, was badly affected as 18 inches of water swept through the ground floor.

The water also flooded into the Wellington Aviation Museum that Gerry, 84, founded in former school rooms adjoining his home in 1990 as a tribute to the RAF personnel who trained at the wartime air base in Moreton-in-Marsh.

Unique books, documents and pictures were ruined. Gerry says: 'The water turned these records into an unidentifiable pulp.'

Fortunately, the building itself was almost unscathed. Gerry says: 'I had every reason to close the museum for good after the floods, but something kept me going.' After some disinfecting and cleaning, the museum was open again within a fortnight.

But repairing Gerry's house took longer. Plaster had to be stripped off the walls, warped floors needed to be ripped up and the kitchen required a complete rebuild.

Gerry parked a caravan in his garden to act as a sitting room and kitchen while the repairs were under way. His insurer, NFU Mutual, paid £60,000 to restore the property and to replace damaged contents. The final recarpeting and redecoration was not completed until May.

Gerry's story is one among many of the lives turned upside down by the flooding. More than 130,000 homes and 30,000 businesses were flooded and 20,000 vehicles were damaged.

Insurers will end up paying more than £3bn to settle claims. Uninsured losses total up to £2bn. Even now, thousands of families are living in temporary housing or caravans. The scale of the floods represented a huge challenge for insurers and loss adjusters. Some managed to handle claims efficiently while others struggled.

Government adviser Sir Michael Pitt was commissioned last year to report on the lessons from the flooding. His final findings are expected at the end of the month but his interim report says: 'There were highly variable experiences of insurers' responsiveness.

'Most homeowners received an immediate response, though some tried for several days to reach their insurer before being able to make contact. The timing of visits from loss adjusters was also crucial... many received visits very quickly while others were forced to wait due to a lack of available loss adjusters.'

Pitt says home insurance companies must adopt common standards in assessing flood claims so householders can get on with clearing out wet and rotting items without waiting for a visit from an adjuster.

Simon Black, head of flood mapping at Norwich Union, says: 'A flood claim isn't like any other claim that we deal with. Homeowners have to live with the aftermath for months on end.

'We have learnt lessons on how we communicate with customers. When someone is going to be out of their home for months, sitting down to discuss rebuilding one week after the shock of a flood is difficult. It may be better to let someone settle in alternative accommodation, then a month later start planning for the future.'

Many of those who were flooded now face increased excesses - the amount they have to pay towards the cost of any future flood claims. Black says: 'We have had to look at £5,000 excesses where someone has a big house and lots of assets to protect.'

NU has increased household premiums by about 10% since last summer, though it says this is not only because of floods. For flood victims unhappy with the deal being offered by their insurer or the claims service they experienced last year, getting another quote is not easy.

The comparison website moneysupermarket.com recently analysed quotes for high-risk postcodes across the UK. It found that in cases where a property had been flooded within the past year, on average only three out of a total of 60 insurers were willing to quote.

The huge losses have also raised questions over whether insurers can continue to provide universal cover against floods. Under an agreement between insurers and the Government, insurance companies promise to offer flood cover to all homes where the risk of flooding is less than once every 75 years and to those in higher-risk areas where flood defences are planned.

In return, insurers asked the Government to boost flood defence spending and to change planning laws to stop building on flood plains. Insurers are reviewing the agreement and there is a chance that some homes may be left without cover.

Black says: 'Newly built properties in high-risk areas will become increasingly hard to insure unless they are built with flood resilience measures in mind.'