Insurance headache after Morpeth floods

Jan 15 2009 by Dave Black, The Journal

FLOOD victims in a Northumberland town are being asked to take part in a major survey amid claims of massive hikes in insurance premiums in the wake of the catastrophe.

Almost 1,000 homes and businesses in Morpeth were flooded when the River Wansbeck burst its banks in September – and now concerns are growing that the town is not being treated fairly by elements of the insurance industry.

Evidence is emerging of some people being refused insurance cover altogether, annual premiums being doubled and policy excesses of £10,000 or more being demanded by companies.

It is also feared that homeowners and business people who were not directly affected by the flooding are also being asked to pay more in insurance because of the perceived future risk.

Now the Morpeth Flood Action Group – which was set up in the wake of the September 6 disaster to represent local residents – is launching a survey in a bid to build up an accurate picture of how the insurance industry is reacting to what happened.

It is sending out a questionnaire to more than 1,000 homes and businesses aimed at collating people’s experiences with insurance providers in a bid to make sure that the industry is not blacklisting the town because of its flooding risk.

The questionnaire is being issued to all properties affected by the flooding, as well as others in adjacent areas to garner information about insurance policy renewals.

The action group says the survey will help identify insurance companies which are ignoring a statement of principles agreed between the industry and the Government in 2005.

Yesterday chairman Alan Bell, who lives in Middle Greens, Morpeth, said: “It was to be expected that the insurance industry would react to the flood by increasing premiums and excesses for those houses and businesses which were flooded.

“However, the problem is more widespread as we know that properties not affected by the flood are also suffering higher premiums and excesses. The insurance companies are assessing future risks on a postcode basis.”

Kelly Ostler-Coyle, from the Association of British Insurers, said: “We are not aware of any specific problems with insurers in Morpeth but are happy to engage with the Flood Action Group and await the results of their survey with interest.”

She said insurance premiums could go up for people who make claims because of the loss of their no-claims bonus.