Is the Industry getting burned with Fire Damage claims?

There is a documented rise in fire damage claims during the summer months in the UK, and it's primarily due to a combination of human activity and environmental conditions that are more prevalent in warmer weather.

Key Reasons for Increased Fire Claims in Summer:

Barbecues and Outdoor Cooking

• Increased use of gas or charcoal BBQs leads to higher accidental fire risk.
• Grease flare-ups, proximity of flammable materials to fences, decking and sheds.

Garden Fires & Fire Pits

• DIY bonfires, chimineas, and fire pits can quickly get out of control.
• People often underestimate wind or dry ground conditions.

Improper Disposal of Smoking Materials

• Discarded cigarette butts on dry grass or near dry hedges can ignite fast.
• Often seen after garden parties or in shared outdoor spaces.

Wildfires and Grass Fires

• Prolonged dry spells make grass, moorlands, and forests highly flammable.
• Particularly common in the South East, Yorkshire, and Wales.

Electrical Fires

• Overloaded extension cords for outdoor equipment like lighting, sound systems, or garden tools.
• DIY wiring for summer setups can be hazardous.

Increased Use of Heat-Producing Equipment

• Electric fans, garden heaters, and solar installations can present faults if not properly maintained.

Industry Data

Insurers like Aviva, NFU Mutual, and the Association of British Insurers (ABI) have reported noticeable seasonal spikes in fire-related claims in summer. Grass and wildfires alone can cause millions of pounds in insured losses, especially in rural and semi-rural properties.

Key Trends in Summer Fire Claims

Surge in Garden Fire Incidents

Admiral Insurance reported that in 2022, garden fire-related claims nearly tripled compared to 2019. The months of May, June, and July saw a staggering 496% increase in such claims compared to the previous year. This surge is attributed to the increased use of barbecues, fire pits, and bonfires during warmer weather.

Impact of Heatwaves

LV= General Insurance highlighted that during the summer heatwaves, fire-related claims soared to £1.2 million. Incidents included fires caused by sunlight reflecting off discarded mirrors and igniting nearby objects, as well as compost heaps catching fire due to high temperatures.

Record Weather-Related Claims

The Association of British Insurers (ABI) reported that in 2024, insurers paid out a record £585 million for weather-related damage to homes and possessions, surpassing previous records. This includes damages from windstorms, flooding, and fires exacerbated by extreme weather conditions.

Financial Implications for Insurers and Policyholders

Increased Payouts

In the second quarter of 2024 alone, UK insurers paid out £1.4 billion in claims, marking the highest quarterly total since data collection began in 2017.

Rising Premiums

The average home insurance policy rose by 19% year-on-year to £396 between May and June 2024, reflecting the increased risk and cost associated with weather-related claims.