The Association of British Insurance companies, the ABI, has issued a statement clarifying the position of Insurance and Claims for Riot Damage.
The ABI warn…..
On current estimates insured losses and damage suffered by individuals and UK businesses are likely to be well over £100 million.
The ABI has reassured customers that they are covered for riot damage under their home and business insurance and claims will be paid by their insurer as quickly as possible. People with insurance should claim directly from their insurer as soon as they can.
Riot Damages Act 1886
When a riot happens a statutory police compensation scheme is activated to provide compensation to organisations and individuals for losses that they could not possibly have predicted. This compensation scheme has existed on the statute books since 1886 with its operation having stood the test of time for the last 125 years.
The scheme means that people who are under insured or do not have insurance have somewhere to go for compensation and redress.
Other organisations, including insurers, can claim under the scheme for money they have paid out to their customers for loss and damage they have suffered as a result of the rioting, although insurers will themselves be liable to pay for business interruption losses, which are not covered by the scheme.
The scheme means that people do not have to pay higher premiums every year to insure their home or business because of a riot which may only happen once every thirty years.
For example, shopkeepers in Tottenham have still been able to get insurance, despite events in 1985, and have not had to pay extra because the police compensation scheme gives individuals and organisations, and their insurers, certainty that costs of the unexpected will be covered.
Contrary to some reports, neither the Home Secretary nor the police need to designate the events as a “riot” in order for the police compensation scheme to be activated. The law sets out a range of criteria for this, for example the number of people causing a disturbance.
Extension of Claims Period
The ABI met with the Home Secretary on Tuesday and have written to ask her to extend the claims period to the police compensation schemes from the usual 14 days to the maximum 42 days to give people the time they need to fully assess the loss and damage they have suffered and properly submit their claim.
Insurers’ priority is to support people affected by the riots in London and other major cities, and people are urged to contact their insurer as quickly as possible to start discussing their claim. Many firms have 24 hour helplines and are on hand with support and advice.
David Cameron has just finished speaking for 165 minutes on the riots in the House of Commons, and has confirmed that the ABI’s request will be met and the period extended to 42 days.
Mr Cameron also stated that the Riot Damages Act provided ‘unlimited’ funds for those affected by riots and both the Treasury and the Home Office would provide the financial support for claims against local police authorities.