Now the cost of the flood damage as "started" to be added up will our insurance companies go bust with such a huge expence to pay out 1.5 billion pounds so far by the end of the claims probably double this amount.
I dont know how much our well known insurance companies are worth in assets!
2007-07-06 08:26:26 · 9 answers · asked by Russell B 3 in Politics & Government ➔ Government
The basic concept of insurance is that the risks (i.e. fire, windstorm, flood etc.) are spread out over all of the policyholders. In any given year some policyholders will experience a loss others will not. Insurance is a mechanism that allows us all to "pool" or share the financial risk of loss that we, as individuals, could not.
Insurance companies charge premiums based on the total losses that have been paid over the previous years and what they anticipate future losses will be. Because flood losses were greater than what would normally have been predicted policyholders will eventually pay higher premiums. If these costs are not eventually passed on to the policyholder your insurance company would indeed "go bust".
2007-07-06 09:31:33 · answer #1 · answered by Tom Z 7 · 0⤊ 0⤋
It is unlikely that the insurance companies will go bust because:
Although 1.5 billion is a lot of money it is spread around many insurance companies.
Insurance companies are only alllowed to underwrite risks up to a certain amount dependant on their solvency margins.
They may have insured themselves (called re-insurance) against large losses arising from a single event.
The FSA, who keeps tabs on insurance companies has not yet seen fit to raise any queries, so presumably has no mjor concerns about capability to pay claims.
Even if the insurance companies failed to meet claims i.e. did go bust, the Financial Services Compensation Scheme would kick in - with the fund meeting 90% of all losses.
I found this on a search engine. Fortis are by no means the largest insurer in the UK
"At year-end 1999 the Fortis group had total assets of €406 billion (£252 billion), "
So don't worry.
2007-07-06 09:44:52 · answer #2 · answered by welcome news 6 · 1⤊ 0⤋
Not really sure on this one. I mean isn't flood damage an act of god ? In which case some insurance companies will not pay out anything.
2007-07-06 08:37:37 · answer #3 · answered by Anonymous · 0⤊ 0⤋
in the adventure that your mothers and dads left the domicile for 3 months without turning off the water they did no longer use the right precautions to steer away from the leak. the regulations are diverse for an unoccupied domicile than for an occupied domicile--your mothers and dads had an criminal accountability to guard their property by skill of "winterizing"- clearing the pipes and turning the water off. in addition to, if the domicile grow to be unoccupied for that long, they could desire to have made provisions for suited coverage earlier they took their holiday. Your mothers and dads are in the incorrect. An insurer has the proper to look at and alter their reaction based upon the circumstances. Too undesirable. Your mothers and dads had a costly lesson.
2016-11-08 08:29:40 · answer #4 · answered by Anonymous · 0⤊ 0⤋
They just put every ones insurance up to compensate especially car insurance.
2007-07-06 08:39:13 · answer #5 · answered by taxed till i die,and then some. 7 · 0⤊ 0⤋
No! They will bleat a bit increase premiums but not go bust
2007-07-06 08:30:08 · answer #6 · answered by Scouse 7 · 0⤊ 0⤋
No way, read the small print they always find an escape route.
2007-07-06 10:36:15 · answer #7 · answered by Anonymous · 0⤊ 0⤋
probably not they have this nasty tendency to say floods are an act of god which their policy doesnt cover
2007-07-06 08:36:39 · answer #8 · answered by vdv_desantnik 6 · 0⤊ 0⤋
No. They can recoup the outlay by increasing our premiums.
2007-07-06 08:33:23 · answer #9 · answered by Anonymous · 0⤊ 0⤋