A furious insurance industry branded Ed Miliband as irresponsible and accused him of raising false hopes when he suggested that insured victims of the floods should receive payments within weeks.
Insurers also challenged claims by the Labour leader’s office that Miliband had recently met senior executives in the insurance industry, saying they had been seeking a meeting with him for some days.
An Association of British Industry source said Miliband was “sending out the worst possible message” to people who had to come to terms with the impact of the recent floods. “Making claims in these situations can be a long and sometimes difficult process,” the source said.
The industry’s anger followed Miliband’s meetings with flood victims in Somerset when he said: “What these families want to know is that they don’t have to wait for months on end to receive insurance pay-outs or wait over a year to get back in their homes.” He added it was necessary to ensure payments were paid within weeks of people submitting claims.
But the person speaking from the ABI said: “It is pointless to give false hope. It is bordering on the irresponsible.”
Senior executives have met ministers at the Cabinet Office, including Oliver Letwin, minister for policy, to assure they have capacity to process claims. But insurers stressed there was no point trying to process claims for houses that were still flooded, or liable to further flooding. The industry insisted emergency payments were being made at the fastest rate possible. Typically loss adjusters were arriving within three to seven days after access to properties became feasible. Insurers said the number of claims being examined was a 10th of the level following the 2007 floods, but it acknowledged that the number would rise.
At the industry summit insurers resisted pressure to switch helplines to local networks rather than keep premium rate numbers. Which? demanded the end of such lines, citing the Environment Agency’s decision to alter its flood helpline from an 0845 to an 0345 number. Insurers argued that affected households were being contacted, including by email.
Meanwhile, the industry is opposing any government move to extend a special flood insurance scheme due to come into force in the summer of 2015. The industry-wide scheme, known as Flood Re, is designed to keep premiums down in the 1-2% of homes at highest risk of flooding, with the premium capped according to council tax bands. This scheme excludes leaseholders, small businesses, properties built after 2009 and about 2,500 wealthy properties in the H council tax band.
The insurance companies assured ministers that there had been no evidence of insurers raising premiums for flood risk properties in advance of Flood Re starting in 2015. The industry has defended the exemptions as the best way to keep the total cost of the scheme down, but ministers said they would review the position.
Leasehold properties should be excluded, the industry says, because freeholders are legally responsible for buying building insurance for their leaseholders (on commercial rather than domestic terms, and commercial properties are not covered by Flood Re).
Michael Dugher, the shadow Cabinet Office minister, derided the industry meeting as a PR stunt, pointing out that no cabinet minister had attended.
Speaking after an hour-long evening meeting of the emergency committee Cobra, Greg Barker, the energy minister, said the army was being switched from protecting properties to helping with the clean-up. He said: “Over a million people have been reconnected to energy networks in a matter of days of the storms.” The next task was to help homes still without power due to the floods where it is currently too dangerous to reconnect. Barker said the prime minister was “still on it, to a micro level”, adding that the worst of the weather was now over.
Meanwhile, the Fire Brigades Union warned that firefighters were being hampered in flood rescues by unsuitable equipment and a lack of staff and training. The union said waterborne infections had become widespread among firefighters drafted in to tackle the floods wearing equipment ill-suited to water. Some firefighters were using ageing or deteriorating boats, the union said, while other crews are wading into swollen rivers without dry suits or specialist vehicles.
The FBU general secretary, Matt Wrack, said the floods response was also hampered by budget restrictions caused by government funding cuts. “A very troubling picture is emerging of understaffed operations, badly equipped firefighters and inadequate training severely hampering their work and creating greater risk for firefighters and the public,” he said
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