UK riots to cost over $323 million
LONDON (Reuters) - Damage caused by riots in London and other British cities this week will cost more than 200 million pounds ($323 million), the Association of British Insurers said Thursday, doubling its previous claims estimate.
The increase came as British prime minister David Cameron said an 1886 law that allows insurers to pass on some of the cost of riot-related claims to the police will apply, with the government ready to make up any funding shortfall.
"The government will ensure the police have the funds they need to meet the cost of any legitimate claims," Cameron said in parliament, adding that the deadline for filing claims would be extended to 42 days from 14.
Under the Riots (Damages) Act, uninsured businesses and households, as well as insurers facing riot-related claims from their customers, can seek partial compensation from the police.
The legislation only covers property damage, with insurers retaining liability for business interruption costs, which can often exceed the cost of physical repairs.
Police forces typically take out insurance against claims under the Act, passing some of the costs back onto insurers.
RSA, Britain's biggest commercial insurer, said it would support the compensation scheme by making its claims and actuarial experts available.
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