Home insurance payouts hit £573m last year as bad weather claims at record high

Home insurers paid out a record £573million in claims for bad weather last year, new figures show.

The bumper payout was 36 per cent higher than the £421million paid in 2022, according to the Association of British Insurers (ABI) trade body.

The ABI said the 2023 surge in bad weather claims was fuelled by a series of storms, including Babet, Ciaran and Debi, that struck last autumn.

Claims for storm damage to homes made up £133million last year, with storm-related flooding accounting for another £286million.

Homeowners also received £153million in payouts for burst pipes, most of which happened in early 2023 due to the cold start to the year.

Home insurance can be patchy when it comes to paying for flood damage to your home and possessions.

This insurance may not pay out for flood damage to sheds, fences and outbuildings, or for the full value of damaged goods in your house, for example.

It may also not pay out for the cost of other accommodation if your house is so badly flooded you have to move out.

If you live in an area prone to flooding, or your property has flooded before, you may not be able to get flood cover at all.

The cost of insuring a flooded home rose by £99 in just one year, This is Money reported last month.

Bad weather also damaged a huge number of businesses, who put in claims for payouts worth £443million.

In total, insurers paid out £4.86billion to homeowners and businesses in 2023. 

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

This is an increase of almost 10 per cent on 2022 totals (£2.33billion) and has been driven by weather-related damage, the ABI said.

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

ABI policy adviser Louise Clark 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, and we continue to press the Government for further investment in flood defence and maintenance, as well as calling for changes to the planning system to discourage building where flooding might be more likely.’