Flood Re: A New Flood Insurance Agreement Reached.On 27 June 2013, it was announced that the Association of British Insurers (ABI) and the government agreed to a Memorandum of Understanding to help ensure that flood insurance continues to be affordable and widely available to hundreds of thousands of households in flood-prone areas. Environment Secretary Owen Paterson stated, ‘[w]e have worked extremely hard with the industry [ABI] to reach an agreement on the future of flood insurance. There are still areas to work through, but this announcement means that people no longer need to live in fear of being uninsurable and that those at most risk can get protection, now and in the future’. This memorandum is an agreement to replace the expiring Statement of Principles with a not-for-profit flood fund, to be known as ‘Flood Re’. The Statement of Principles was always intended to be a temporary measure until a more permanent solution could be developed. While there are still many details that have yet to be worked through, the framework for Flood Re has been established and implementation of the new scheme is tentatively set for the summer of 2015. The following provides some of the key elements of the agreed-upon Flood Re scheme.
WHAT IS FLOOD RE?
Flood Re will be a not-for-profit fund run and financed by insurers in order to cover homes at high risk for flooding. Insurers will place these high-risk homes, ones that they feel unable to insure themselves, into the fund. Premiums will be capped based on Council Tax bands, thus creating a limit on how much flood insurance will cost for the homeowner. The capped premiums will start at £210 per annum for homes in Council Tax bands A and B, rising to £540 per annum for homes in Council Tax band G. These premiums, along with a levy on all household insurers of £180 million a year (averaged out as £10.50 per household policy), will go into the fund to help pay out any claims. However, Flood Re will also have certain exclusions. Homes in England’s highest Council Tax band, H, will not be included in the scheme, nor will equivalent properties in Wales, Scotland and Northern Ireland. Homes built after 1 January 2009 will also be excluded in order to avoid unwise building in high risk flood areas. Additionally, Flood Re appears to exclude to small businesses, differing from the current Statement of Principles. Therefore, once Flood Re is implemented, small businesses will likely have to obtain flood cover on the open market like medium and large businesses.
WHAT HAPPENS NOW?
Until Flood Re becomes finalised and implemented, the ABI has stated that their members will voluntarily continue to meet their commitments to existing customers under the Statement of Principles. Flood cover will continue to be offered to: Domestic properties and small businesses where flood risks are not ‘significant’, generally defined as properties with no greater than a 1.3 per cent or 1 in 75 annual probability of flooding, and Domestic properties and small businesses where the government has announced plans and notified the ABI of its intention to reduce the flood risk to below ‘significant’ within five years. Premiums will continue to reflect the level of risk presented by the specific property, and properties built after 1 January 2009 are still excluded. This means that there will be no immediate change to current structure of flood insurance during this transitional period.Bromwall Ltd will keep you updated on any new developments as more information and details are released, and help ensure a smooth transition once Flood Re is implemented.
Call Bromwal Ltd on 01707 883377 or email us on firstname.lastname@example.org to discuss.
The Consumer Insurance (Disclosure and Representations) Act 2012 came into force on 6 April 2013 and applies to all consumer insurance contracts entered into on or after that date. The Act modifies principles of consumer insurance law in England, Wales, Scotland and Northern Ireland.This Act applies only to consumer insurance contracts, or insurance contracts made by individuals ‘wholly or mainly for purposes unrelated to their trade, business or profession’. This also includes ‘mixed-use’ contracts, or contracts that cover both personal and business use, as long as the main purpose of the insurance contract is personal. These new duties and responsibilities will not affect commercial or business insurance contracts. The following provides a general overview of the new requirements and duties for the consumer, and insurer remedies if duties are breached.GENERAL OVERVIEWPreviously when purchasing personal insurance, the consumer had a legal duty to disclose and not misrepresent any material fact that a prudent insurer would consider relevant. If a consumer breached this duty, the insurer could then avoid paying out the claim, regardless of whether the non-disclosure or misrepresentation was an innocent one. The Act now places the duty to gather information on the insurer instead, requiring the insurer to request from the consumer any material information needed to assess the risk. The consumer’s new legal duty is to take reasonable care not to make a misrepresentation to the insurer.Consumer’s Duty to Take Reasonable Care Not to Misrepresent Even though the insurer now has the duty to ask for relevant information from the consumer before an insurance contract is entered into or amended, the consumer must still take reasonable care to not make a misrepresentation. A misrepresentation can include the failure to respond to a request to confirm or amend information previously given. The standard of care required is that of a reasonable consumer. Whether a consumer took reasonable care or not will be determined in light of all relevant circumstances. The Act lists several circumstances that can be considered when making a reasonable care determination, including:
− The type of consumer insurance contract and its target market
− Any relevant explanatory material or publicity produced or authorised by the insurer
− How clear and how specific the insurer’s questions were
− In cases where the consumer failed to respond to an insurer’s questions, how clearly the insurer communicated the importance of answering those questions and possible consequences
− Whether or not an agent was acting for the consumer
In addition, whether the insurer knew or should have known of particular characteristics or circumstances about the consumer must be taken into account. Any dishonest misrepresentation will always be determined as showing a lack of reasonable care.
To discuss further contact Bromwall Ltd on 01707 883377 or email us on email@example.com
In order to comply with your insurance cover the property that is insured must be regularly maintained with special attention to any requirements imposed by the insurers following a survey of the premises. The following points are just a few of the things which must be carefully considered:1. Make sure the electrical inspection certificate is up to date.2. Any flat roofs must be inspected and any defects repaired.3. Gutters should be inspected and cleaned out as necessary.4. Storm drains should be inspected and cleaned out as necessary.5. If an alarm is required by the insurers then it should be checked in accordance with NSI, SSAIB requirements.6. Check to see that any roof mounted equipment is secured soundly and also check that lightening conductors are connected and there is no break in the connection.7. Complete a fire assessment in accordance in accordance with H&S requirements.8. Trim back any foliage and have trees pollarded regularly if necessary.9. Fire extinguishers must be checked annually.10. Check all stairways and walkways for surface defects where trips or falls could occur.These seemingly basis steps are so often overlooked and in the event of a claim can be a reason insurers do not pay. The insured has a duty of care and as a result, you must make sure basic steps are carried out to ensure you do not invalidate your policy.
To discuss your property insurance requirements contact Bromwall on 01707 883377 or email us on firstname.lastname@example.org
There are some Brokers and even some insurers who will provide an insurance quotation even though they must be aware that the cover they are providing is not fit for purpose. Business interruption is often miscalculated and under insured, and in the event of a major claim, leaving the client with a large loss which could result with the business failing. Brokers in order to compete with an existing renewal will try every trick to reduce the premium in order to gain the business. The client is completely unaware and quite happy to pay a lower premium. We have found that one way to reduce the premium is to quote business interruption on a gross profit representing 12 months when the existing indemnity period is 24 months. This can roughly reduce the premium by about 30% but in the event of a claim the client will be underinsured. Brokers will also obtain quotes on reduced turnover and wages. This leaves the liability cover underinsured. Although this does not affect the cover it will produce a large additional premium at the end of the term. There has also been an instance of a broker reducing material damage cover to indemnity only. This would only show up if there was a claim and the payment would not be on a replacement basis but on the basis of the value of the goods at the time of loss, less wear and tear. If an insured is offered a premium well below their existing premium examine this very careful as it may not be worth the paper it is written on.
We are happy to discuss your Commercial Insurance queries with you – call us on 01707 883377 or email us on email@example.com
From the 1st April 2013, new regulations came into effect that change the way employers and public liability insurance injury claims are dealt with.If your business faces a claim with a value up to £25,000, the process in which it is dealt with has changed. So how does this impact on your business? This is the new protocol:1) All personal injury claims must be reported to your insurer by the claimants representatives via an electronic portal (already carried out for Road Traffic Act claims since April 2010)2) Three stages to the process are applicable with strict timescales and fixed costs payable at certain stages.3) Once an insurer is notified, they have 30 days to admit liability in respect of employers liability claims and 40 days for public liability claims.4) If contributory negligence is alleged, the case will fall outside the process and is expected to attract higher costs.5) Under an employers liability claim the defendant has to provide details of earnings within 20 business days of the admission of liability.
As a policy holder, what am I expected to do?
Its advised to keep claims within this process so as to keep costs down. To do this you will need to:– Notify anything you think will or may be a claim immediately. If you are not sure, notify anyway (speak to your broker)– Obtain and gather as much information as you possibly can surrounding an accident or incident. This is so an early decision can be made by your insurers and avoids the need for detailed investigations to be carried out by your insurers, incurring further costs.– Take an objective opinion of who is to blame and if there is only a small element contributory negligence, consider the cost benefits of an early admission to insurers against costs payable if the claims falls outside the process.
We are happy to discuss your liability queries with you – call us on 01707 883377 or email us on firstname.lastname@example.org
I’d just like to convey my thanks for the excellent job, it is so refreshing to find a company that is genuinely passionate about its customers.
John Grainge | Islington, London
Bromwall and especially Amanda have been so helpful and supportive – always making the effort to contact me and ensure I was fully informed and, had completed all the necessary steps in the process.
Paul Bridgewater | PB Systems, Leeds
I have yet to find another insurance broker, in my years dealing with the top names in the industry, who offers Bromwall’s personal service, professionalism & expertise. I would happily recommend Bromwall to everyone who has high net worth and complex business insurance requirements.
Louise Daniels | Lion Enterprise, Manchester
For a variety of both motor and household briefs as well as for demanding professional activities, Bromwall Ltd have consistently delivered the most competitive quotations to us, along with a very personal and exacting service. We would not hesitate in fully recommending Bromwall for any matter relating to insurance.