Flood and storm insurance claims

During winter and spring, the UK frequently suffers significant weather events, when storms and flooding can cause property damage to homes and businesses. The ongoing coronavirus (Covid-19) situation may present operational challenges to insurance firms when managing claims involving floods and storms.

We remind insurers that it is essential they have plans in place to manage this and continue to operate effectively when there is pressure on services. 

In our work with insurers, we have seen different steps they have taken to prepare. These include: 

  • Reviewing and adjusting their operational contingency plans to address the additional challenges they have identified from the coronavirus pandemic.  
  • Conducting reviews of capacity and resources of the supply chain, and of third parties who handle claims for the insurer.
  • Assessing the impact of coronavirus on the claims process and adjusting it as necessary. This includes factors such as the impact of lockdowns and other coronavirus restrictions on service providers’ ability to access and carry out work in affected areas, and the availability of alternative accommodation where needed.

Customers affected by damage caused by storms or flood water may require immediate assistance. This means it is critical that they can contact their insurer quickly and speak to staff who are able to deal with their claim. We have seen some insurers addressing this challenge, particularly where the pandemic may lead to staff absences, by cross-training staff so that they can be deployed quickly and flexibly to respond to affected customers as claim volumes increase. 

Firms should make sure  that they are able to respond to customers appropriately, including customers they have identified, or who identify themselves, as vulnerable. Firms should also recognise that some customers may be facing financial difficulty because of the pandemic. This may affect their ability to pay for any immediate costs, such as paying for alternative accommodation or replacement items, while their insurance claim is being processed.

We remind insurers to consider if emergency and interim payments are appropriate in the customer’s circumstances, and to make sure they make payments in a timely way. 

We expect firms to handle storm and flood claims promptly and fairly regardless of the challenges from the pandemic, making sure that customers do not face barriers or delays when making a claim. Firms should provide customers with clear communications about the information they need to support their claim. Firms should also keep customers informed on progress, including timeframes for any work to be carried out and settlement payments made.

Insurers hold regulatory responsibility for the claims process and outcomes, including when they delegate the handling of claims to a third party. They must maintain appropriate oversight of these arrangements to make sure that their outsourcing relationships are meeting the insurer’s regulatory obligations.