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Think before you sign - Healey issues flood insurance warning

Published 18 July 2007

Floods Recovery Minister John Healey today urged people in flood-hit communities to seek free and impartial insurance advice before signing up with third parties who offer to help settle insurance claims.

Publishing information setting out how people can access free insurance advice he warned that accepting help from third parties could mean people are left short of the money they need to fully repair their damaged homes and replace prized possessions.

His top tips include:

  • You can make a claim directly and free of charge direct to your insurer
  • You don't need to pay a 'middleman'
  • If you choose to accept help from third parties check they are regulated by the Financial Services Authority
  • Free, independent advice is available from your local Citizen's Advice Service

Having visited a number of affected areas John Healey's top priority is for life in communities to get back to normal as quickly as possible. Key to this is people being able to repair their homes and replace their possessions at the earliest opportunity. So access to free insurance advice is essential. He has met with the insurance industry and heard how they are putting extra resources into speeding up the claims process.

Flood Recovery Minister John Healey MP said:

"I've visited a number of communities affected by the floods and have spoken with people whose homes have been damaged and have lost much of their belongings. I know a lot of people are very upset and feel vulnerable at this difficult time.

"That's why our top priority is for life to return to normal as quickly as possible. I have been working with the insurance industry to ensure that claims are being dealt with swiftly so people can start making repairs to their homes and replace possessions. 

"It is important people know where to access free and impartial advice so I'm arranging for practical information to be made available in flood affected communities. 

"So there is no need to use a 'middleman' who might offer to settle claims in return for a cut of the payout. But where people choose to do this it is important they understand this could leave them short of the money they need to fully repair their damaged homes and replace prized possessions.

"My message is clear - if in doubt speak to the Financial Services Authority, Association of British Insurers or the Citizen's Advice Service. They are there to help."

Notes to editors

1. The information published today will be made available via Government Offices and local authorities in flood-affected areas.

2. The text of the information is set out below.

Insurance Advice

Following the recent floods have you been approached by someone offering to help you fill out your insurance claim?

Before accepting such an offer you should know that:

  • You can make a claim directly and free of charge from your insurer
  • A third party may take a cut of any payout If you choose to accept help from a third party check they are regulated by the Financial Services Authority or are an exempt professional firm such as a law firm
  • Free, independent advice is available from your local Citizen's Advice Service

This note is designed to give advice to those households in flood damaged areas who are intending to claim on their insurance policies and to let you know that you can make a claim directly and free of charge to your insurer. Insurers are regulated by the Financial Services Authority (FSA) and they have to handle your claim fairly.

Following the recent flooding you may be approached by individuals or companies who offer you help in progressing your insurance claims (for example, by offering to notify your claim to the insurer or to negotiate it on your behalf).

Recent advice from the FSA, endorsed by the Association of British Insurers (ABI) recommends that you think carefully about whether you want to hire a third party's help.

The ABI have reported that

"the insurance industry has mobilised staff and contractors from around the country to meet the enormous challenge the widespread flooding has brought. We are working with the Government and local authorities to put families, businesses and communities back to normal as quickly as possible."

If however you do decide you want to hire a third party to help you progress your insurance claim, make sure you check how much it will cost you first as they may charge a share of any sum paid out by the insurer. This may leave you short of the money you will need to repair damage and replace possessions.

Before accepting the help of individuals or companies who will expect payment in return for their service you should also check that they are regulated by the Financial Services Authority (see their Register at http://www.fsa.gov.uk/register/home.do [External link]) or are an exempt professional firm such as a law firm (see the Exempt Professional Firm (EPR) section of the FSA Register).

Where to go for help

National Advice

The Financial Services Authority (FSA) is an independent body that regulates the financial services industry in the UK. As well as regulating most types of financial services firms, one of their main aims is to protect customers of financial services, including insurance.

The Financial Services Consumer Contact Centre can answer general enquiries about financial products and services. They can also tell you if a firm is authorised and point you in the right direction if you don't know who to contact.

You can contact them by calling their Consumer Helpline (call rates may vary):

0845 606 1234 Minicom or textphone - 0845 730 0104.

Opening hours are between 8am and 6pm Monday to Friday.

The Association of British Insurers (ABI) http://www.abi.org.uk/ [External link] has a useful list of questions and answers about flooding and insurance on their website.

Local Advice

Free, independent and confidential advice on financial matters such as progressing insurance claims is available from your local Citizen's Advice service. Advice is available face-to-face and by telephone.

To find your local Citizens Advice Bureau and to get details such as opening times, phone numbers, information about access to the bureau and other languages available in addition to English go to http://www.citizensadvice.org.uk/index/getadvice.htm [External link] or phone 020 7833 2181.

Useful Sources of Information

For factsheets on insurance

ABI Information Zone
www.abi.org.uk [External link]

For insurance guides and Find a Broker service
British Insurance Brokers Association (BIBA)
www.biba.org.uk [External link]

Consumer Helpline - 0901 814 0015
For an insurance broker who is an IIB member
The Institute of Insurance Brokers (IIB)
www.iib-uk.com [External link]

For guidance on making a claim for compensation
The Claiming Compensation guidance leaflet
www.advicenow.org.uk/compensation/ [External link]

Or

Dedicated Claims Regulation site
www.claimsregulation.gov.uk/publications.aspx [External link]
Dedicated telephone number - 0845 4506858.

 

Media Enquiries: 0303 444 1137; out of hours 0303 444 1201 Public Enquiries: 020 7944 4400; Email: press.office@communities.gsi.gov.uk News Releases: www.communities.gov.uk.

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