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Winter weather results in £1.4bn insurance claims

Big freeze hits the insurance sector hard

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Snow and ice can cause traffic chaos

The freezing weather that engulfed the UK in December resulted in a major increase in car and home insurance claims, costing the industry £1.4 billion. 

Snow, frost and flooding at the end of 2010 have cost the car and home insurance industry twice as much in claims than at the same time a year earlier, according to the Association of British Insurers (ABI). Burst pipes was the root cause of most claims, with more than 100,000 claims being lodged. These accounted for £680mn in claims. 

It is estimated that upwards of 270,000 vehicles were damaged as a result of the winter weather, leading to around £530mn of claims. 

ABI director of general insurance and health Nick Starling commented: ‘Insurers always respond quickly to the large numbers of claims that often follow from bad weather, and helped thousands of customers get through a very tough December. The big freeze highlighted that when bad weather strikes there is no substitute for insurance.

‘During a similar bout of freezing temperatures the previous winter, insurers paid out £700 million in weather-related claims. Despite the last couple of winters being costly, insurers will continue to do all they can to ensure that the market remains as competitive as possible for consumers.’

Premiums not affected

The ABI has said that there is no evidence that car or home insurance premiums have risen as a result of the recent glut in claims. However, Which? believes that the ramifications will filter down to consumers over time. 

Which? insurance expert Dan Moore said: ‘ A hike in claims being processed and potentially paid out will have an effect on premiums. This is inevitable, and makes it even more important for people to shop around for cover.’   

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