Some insurance claims may risk wrong-kind-of-weather rejection – Which?

Some home insurance customers could find themselves at risk of claims being rejected because the wrong kind of weather was involved, according to Which?

The consumer group has raised concerns that insurance claims could be turned down by some providers for what it considers to be potentially unfair definitions of storms and floods.

The consumer group looked at 133 insurance policies sold by 67 firms, and said that nearly a third (32%) of home insurance policies contain what it views as potentially unfair flood definitions, and a fifth (20%) of policies have potentially unfair storm definitions.

Which? believes flood definitions could be potentially unfair if they exclude gradual, slow and steady entry of water into or outside a building, for example by specifying that water must have entered suddenly or rapidly.

Flood definitions may also be unfair if they exclude water ingress from external certain sources, for example because of non-natural events such as a burst water main, the consumer group said.

Which? said storm definitions may be potentially unfair if they stipulate a single type of weather must be involved, such as high winds, or if they exclude certain types of weather on its own, such as rain, hail, high wind or snow, either explicitly or by omission.

It looked at expert, industry, regulatory and ombudsman guidance on defining floods and storms to establish potentially unfair definitions.

Which? said more than half (56%) of home insurance policies reviewed did not have a definition for a flood and a third (32%) did not define a storm, potentially leaving customers without clarity on what they should expect.

It said that examples of claims previously reviewed by the Financial Ombudsman Service (FOS) showed some insurers had rejected claims because they claimed winds speeds were not high enough for a storm to have occurred.

There were also cases where claims have been rejected when flood damage was deemed to have happened too slowly, Which? said.

Which? also carried out a survey of 1,325 people across the UK with buildings insurance, which found more than two-thirds (69%) defined a flood as an event where water enters and builds up in a home regardless of speed, while three-fifths (60%) defined a storm as a combination of extreme weather conditions, any of which could happen alone.

The consumer group said it wants the Financial Conduct Authority (FCA) to investigate whether all firms’ storm and flood definitions comply with the Consumer Duty as part of its ongoing claims-handling review.

Rocio Concha, Which? director of policy and advocacy, said: “Consumers rightly have common sense expectations of what should and shouldn’t be covered by storm and flood damage and they’re backed up on this by industry guidance.

“The FCA must use its review into claims handling to assess whether firms are complying with their obligations under the Consumer Duty – and shouldn’t hesitate to take tough action against those falling short.”

A spokesperson for the FOS said: “Storms and floods can wreak havoc on your property, and it can be overwhelming to deal with the damage caused.

“During these difficult times, we expect insurers to treat consumers fairly and settle claims promptly.

“If a consumer feels unhappy with the service provided by their insurer, they should firstly raise an official complaint with the firm about the issue.

“If it hasn’t been resolved to their satisfaction or they don’t feel they’ve been treated fairly, they should contact our free, independent service and we’ll see if we can help. Getting a fair answer is free and easy.”

Kelly Ostler-Coyle, head of communications and stakeholder engagement at Flood Re, a scheme which helps to make the flood cover part of household insurance policies more affordable, said: “Flood Re has supported more than 600,000 households access affordable home flood insurance since its launch in 2016.

“Our definition of flood was agreed by the insurance industry and the government ahead of the 2014 Water Act. Flood Re is a reinsurer which means we reimburse insurance providers the cost of an eligible flood claim once they have already settled it with their customer.”

The FCA is reviewing insurers’ claims handling arrangements and whether systems, controls, governance and oversight structures drive good consumer outcomes.

It is aiming to publish the findings in the second quarter of 2025 and this will include looking at insurers’ responses to storm damage claims as part of its overall considerations.

Under the Consumer Duty, firms must make sure customers understand the products and services they are buying, including ensuring that communications meet customers’ needs and are likely to be understood by customers.

An FCA spokesperson said: “People rely on home insurance to protect them against storms and floods.

“Insurers should handle claims quickly and fairly and make sure customers understand what their cover includes, but it is vital people check for any exclusions before arranging protection.”

A spokesperson for the Association of British Insurers (ABI) said: “Our description of what constitutes a storm provides a helpful guide for insurers to work with, for example by outlining the windspeed which could cause damage to a well-maintained property.

“It’s based on the Beaufort wind force scale, but it’s not binding, and each insurer will approach claims differently and may use their own classification.

“Generally, flooding is described as substantial and unexpected water damage from an external source, impacting property at a ground level. While most buildings insurance covers flooding, water damage caused by a gradual rise in the water table, or rising damp, may not be included as this type of damage is usually predictable.

“The industry paid out a record £585 million for weather-related damages to homes and possessions in 2024, demonstrating insurers’ continued commitment to helping people recover when the worst happens.

“Our members continue to work hard to meet their customers’ needs and regulatory requirements, including the Consumer Duty. As we face more extreme and frequent weather events, prevention measures are crucial – which is why we remain vocal on the need for climate-resilient buildings that are built in the right places, and not in flood zones.”