Pub flood victims now in insurers' hands
The fate of thousands of flood-damaged pubs now rests in the hands of insurance companies.
There is a growing fear that insurance premiums and excess levels could be in for a massive hike as the national cost of flood damage to insurers reaches an estimated £2.5bn. The companies are now dealing with 50,000 domestic and commercial claims.
At the peak of the flooding last week, up to 500 pubs were closed.
It is unlikely there will be a doubling or tripling of premiums - it's more scientific than thatAn insurance expert.
One insurance expert said excess levels in flood areas could now rise.
"If you are now faced with a £5,000 excess and have £30,000 worth of damage - that could really harm you.
"It is unlikely there will be a doubling or tripling of premiums - it's more scientific than that. But some companies, if they have taken a massive hit, may decide to withdraw from certain postcode areas."
Pubcos insist tenants take out buildings insurance through themselves, but expect them to arrange their own loss of earnings and contents cover.
The expert added that pubco tenants, not directly affected by flooding, could also see buildings insurance premiums rise as a consequence.
"This has also alerted a lot of big estate owners that they are not necessarily checking where the policies join - for example, who pays for the wallpaper?"
Some licensees claim they were already uninsurable. Jonathan Butler, Scottish & Newcastle lessee at Ye Olde Anchor pub in Upton-upon-Severn, Worcestershire, who was visited by Prince Charles last week, said: "I went through a broker who told me I just couldn't get it. There hasn't been a flood here in 60 years. It is ridiculous."
Martin Ash, Greene King tenant at the George in Botley, Oxfordshire, faces a similar problem.
"We can't get insurance, end of story. There have been too many claims here for flood damage in the past, so we are like a red alert for insurers. We have been here 14 months and thrown all our profits into making this a success. Now, I don't know where to turn for help."
Federation of Licensed Victuallers Associations chief executive Tony Payne urged pubcos to help uninsured tenants pay their bills. "It used to be part of the area managers' job to check policies were in place every 12 months."
Cookseys DMP managing director David Morgan warned that even where loss of earnings cover was in place it could take months to claim.
"It's important to remember that flood victims will only be able to claim back net profits, not actual turnover, and this process can take up to nine months and it's certainly not in the insurance companies' interest to speed up claims."
Greene King Pub Partners managing director David Elliott added: "We can only hope insurers, loss adjusters and building contractors can cope with this massive increase in claims and work, and do not take advantage of this tragedy by producing over-inflated prices and premiums in the future."
