More insurance claims ‘could increase rates’

The elevated amount of insurance claims brought about by the cold winter weather could have a knock-on effect for insurance prices, which may harm those struggling with debt, an industry expert has warned.

Steve Foulsham, technical services manager for the British Insurance Brokers’ Association, was speaking in reaction to figures released by the Association of British Insurers.

The statistics showed that extreme conditions in December and January in the UK led to 335,000 claims, with insurers paying out around £650 million as a result.

Motor accidents and damage to homes and businesses made up most of the amount, due to high numbers of accidents on the roads and burst water pipes indoors.

Mr Foulsham said: “It wouldn’t surprise me one bit if it leads to some sort of rate hikes in the market, because of the sheer volume of claims.”

Earlier in the week, a study carried out by uSwitch.com revealed that about 5.5 million households are now in debt to energy suppliers following the freezing temperatures of the last few months.

By Joe Shervin