The extreme weather in Northern England has caused significant damage over the past few days, causing more than 500 properties to be flooded and 1,200 households to be evacuated, according to PwC.
There is a strong likelihood that the damage may increase soon due to further rain forecast.
The government has announced that 200 UK armed forces personnel have deployed this morning to South Yorkshire to support flood relief efforts. The troops will assist civilian authorities on the ground by bolstering flood defences in the Doncaster and River Don area.
The ministry of defence indicated that, if necessary, soldiers will also provide help warning and informing residents, and support with potential evacuation efforts from affected areas.
General insurance leader at PwC, Mohammad Khan commented that, due to the number of significant incidents that have occurred since the flood in 2007, the insurance industry is “much better prepared in helping affected policyholders quickly in dealing with this extreme weather”.
“Although it is still early to estimate the full losses from these floods, the losses to date could see the insurance industry paying out between £80m and £120m in claims for both people's homes and affected businesses,” he added. “This estimate could rise over the coming days depending on how much further rain falls over the rest of the week.”
Policyholders that were flooded used to experience significant increases - sometimes by thousands of pounds - in insurance premiums. The setting up of Flood Re helped to mitigate the spike.
PwC said however that it would not expect to see anywhere close to this level of premium increase for flood affected policyholders. Those who shop around may be able to match their current premium, but most could see a modest increase in price.
Khan added: "Currently the household insurance market is very competitive with many insurers trying to grow their share of the sector.
“These firms are often writing premiums for new policyholders at a loss to bring in new business despite household insurance claims costs rising in recent years.
“Given the competitiveness of the sector, non-flood affected customers who shop around may be able to match last year’s premiums.”
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