Posted on February 6, 2014
Insurers often get a bad press – but in some instances this is not justified. Following the riots in 2011 there was much criticism of the delay in providing settlement to those who had lost property in the riots.
Riot is covered as a standard peril on property insurance policies and, as such, you would think no issues arise and therefore no delay.
However, there is a piece of legislation called the Riot (Damages) Act 1886 which provides compensation in the event of damage caused by persons “riotously and tumultuously assembled”. This legislation sets out the statutory duty of the various police forces to compensate those affected or their insurers if payment has already been made by way of an insurance claim.
Following the recent riots there was a huge amount of uncertainty around the definition of riot and the actual compensation which was due.
Insurers provide riot cover on the basis that this compensation will be forthcoming and so lack of clarification causes delay whilst this is sought.
As a result of this uncertainty, the Home office commissioned an independent review of the act with a view to bringing it up to date. The findings of the report were published at the end of last year. The recommendations in the report provide more clarity – however there is still discussion around some of the detail.
Whilst we hope that the scenes in Tottenham and elsewhere which occurred in 2011 are not repeated, at least there will be a bit more clarity on how damage is to be paid for following any future riots.