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Home insurance in Wales
Wales is an interesting country to live in. Not least because it
can be quite sparsely populated, which can make it quite difficult
for utilities providers to supply all the homes with what they require,
as they find it more difficult to offer bulk or integrated solutions.
This means that sometimes you can be left for says without power
rather than hours in the event of a bas storm. This has an effect
on your home insurance in ways you may not think of easily.
Power companies do not actually have an obligation to compensate
homeowners should they lose power because of a storm. Under normal
circumstances, most power companies will offer you a guaranteed
payment should you go 18 hours without power, but there is a loophole
for storms, mainly because there is no way the power companies can
know when a storm will occur and what it will affect.
However, there is a certain line of thought that power companies
should be able to make their supply of electricity “storm
proof”. Maybe they could employ more staff or make their supply
network more robust. At the moment, power companies do not even
have to offer discretionary compensation in extreme cases.
The problem in Wales has been that some people are finding their
power out for long periods, such as three days or more. This can
cause problems for hotels for instance, who have large supplies
of frozen food that they have. These hotels are popular, but after
the storms in October 2002, some hotels were out of electricity
for 3 or 4 days. This means that their frozen food could thaw, costing
them maybe thousands of pounds.
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The reason this affects home insurance
is that the only way to cover the cost of frozen food is through
contents insurance. The electricity companies will not compensate
you for the loss of supply through the effects of a storm, so the
only way to cover the food lost is to claim on home insurance,
which will push up your premiums. You should make sure the level
of cover you have is relevant to the risk that you will need this
cover.
The whole issue has been brought to a head by the October 2002
storms, because of the damage that they caused both in terms of
the effects of flying debris and falling trees, but also because
of the effect on power supplies. The loophole that makes power companies
not liable for the loss of electricity to their customers for over
18 hours if it is caused by storms could be closed.
Water companies are already becoming liable for the effects of
floods. Power companies could be next.
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Wizen
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