£1.4 billion cold-weather bill for insurers

The true extent of damage caused by the cold weather in December 2010 has been revealed by the ABI (Association of British Insurers). It has just released details suggesting that insurance companies have forked out a massive £1.4 billion to cover the damage.

To put this into perspective, that is more than twice the amount paid out in insurance claims the last time the country suffered a bout of freezing weather (£650 million).

From properties to vehicles to businesses, nothing was spared from the sub-zero temperatures and heavy snowfall that hit the UK throughout December. Low-speed vehicle collisions and burst pipes were some of the biggest problems, with burst pipes alone responsible for 100,000 claims at a cost of £680 million.

In total, there were 478,000 claims made during the spell of freezing weather. 190,000 of these were for home insurance, totalling £900 million, and the rest were claims on car insurance policies, making up a total of £530 million.

The director of general insurance and health at the ABI, Nick Starling, said that “when bad weather strikes there is no substitute for insurance”.

He added that even though it had proved to be a very costly time for insurers, they would do all that they could to keep prices competitive. As of this moment it does not appear that premiums have gone up as a result of the bill, and hopefully it will stay this way.

It is of course a legal requirement to have car insurance but if you are in any doubt about the need for home insurance then this could be a good reminder of the huge bills that you can face if you don’t take out the appropriate cover.