Business

Record £573m paid out in weather-related home insurance claims in 2023 – ABI

The rise in costs was largely fuelled by the succession of storms, including Babet, Ciaran and Debi ,the Association of British Insurers said.

Flooded fields in 2023. Home insurance claims for weather-related damage claims reached a record £573 million last year, according to the Association of British Insurers
Flooded fields in 2023. Home insurance claims for weather-related damage claims reached a record £573 million last year, according to the Association of British Insurers (Ben Birchall/PA)
By Vicky Shaw, PA Personal Finance Correspondent

Home insurance claims for weather-related damage reached a record £573 million last year, according to the Association of British Insurers (ABI).

This was over a third (36%) higher than in 2022, when the total was £421 million.

The rise was largely fuelled by the succession of storms, including Babet, Ciaran and Debi, according to the association, whose records on weather-related domestic claims go back to 2017.

Homeowners’ storm damage claims, including those for high winds, totalled £133 million, with flooding adding £286 million. A further £153 million of weather claims came from burst pipes, most of which happened in the first three months of 2023 at the tail end of a cold winter.

The average weather-related payout for home insurance last year was approaching £5,000, at £4,916. This was a jump compared with 2022, when the figure was £3,077.

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Wet weather in Piccadilly Circus, London in November 2023
Wet weather in Piccadilly Circus, London in November 2023 (Matt Crossick/PA)

Weather damage was not just a problem for homeowners, with businesses incurring £443 million in weather claims in 2023.

The average weather-related payout for businesses last year was £18,542, jumping from £12,612 in 2022.

The ABI said that property insurers had typically paid out around £13 million per day last year to help homeowners and businesses cope with events including flooding and theft.

The industry paid out £4.86 billion to homeowners and businesses in 2023, the ABI said.

More than half of this figure – £2.55 billion – was for home insurance claims.

The ABI said this total was up from £2.33 billion in 2022 and was driven by weather-related damage.

While the total number of claims remained fairly level, the average claim paid to businesses and homeowners rose to £6,235, an 11% increase compared with 2022.

The promenade in Folkestone, Kent in November 2023, as Storm Ciaran brought high winds and heavy rain along the south coast of England
The promenade in Folkestone, Kent in November 2023, as Storm Ciaran brought high winds and heavy rain along the south coast of England (Gareth Fuller/PA)

Louise Clark, policy adviser at the ABI said: “Extreme weather events may not feel so rare as they used to as we grapple with a changing climate.

“Insurers continue to be there for affected homeowners, with payouts hitting record levels after a particularly difficult autumn and winter with seemingly countless storms, from Agnes onwards leading to significant flooding.

“While insurance will continue to protect homeowners and businesses, we can’t afford to lose momentum on our flood defence programme.”

The ABI said that, when adjusted for inflation, the average cost of a home insurance claim has risen by 16% since 2017, while average premiums have fallen by 13% over the same period, when looking at combined buildings and contents cover.