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Riot Insurance: Insurers call for compensation period extension to help the uninsured

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Insurers are lobbying the government to extend the period of time in which those who are uninsured but affected by the riots can claim compensation from the police.

Under the 1886 Riot (Damages) Act, which the recent spate of riots across the country fall under, anyone who has property or buildings damaged due to a riot can request a pay out from the local police force. There is no limit on how much can be claimed; however it must be done within 14 days.

Insurers have already advised that they will pay out on claims from customers who have been caught up in the troubles, but they are also advising non-customers and those who aren’t insured to apply for claims from the forces’ compensation schemes.

The Association of British Insurers (ABI) however said that this could prove extremely difficult to do within the 14-day time limit currently imposed.

A spokesman for the ABI said, "In many cases the properties, residences and businesses damaged and destroyed are currently crime scenes or are entirely unsafe due to structural defects caused by fire, for example.”

"In such cases owners are prevented from entering their homes or business premises to assess the damage they have suffered."

Due to this, the ABI has met with home secretary Theresa May hoping to extend the current claims period from 14 days to 42 days so that homeowners and businesses are given the chance to assess the damage, and also to find out about the scheme and how to apply.

The ABI also went on to assure those affected that contrary to reports, there is no need for the recent troubles to be designated as a riot for the schemes to pay out. There are different sets of criteria that can be used such as the number of people involved.

Insurers have also warned that the cost of the rioting has already reached the £100m mark before the rioting in Manchester and Gloucester began. Although insurers will be looking to pass on the cost of the claims to police, Labour MPs have warned that many small companies face bankruptcy as a result of looting and disorder, and the economic recovery that Britain is currently in could be knocked substantially off course.

By Ben Malkin © Copyright Autonet Insurance