Power companies do not actually have an obligation to compensate homeowners should they lose power because of a storm. Under normal circumstances, most power companies will offer you a guaranteed payment should you go 18 hours without power, but there is a loophole for storms, mainly because there is no way the power companies can know when a storm will occur and what it will affect. However, there is a certain line of thought that power companies should be able to make their supply of electricity “storm proof”. Maybe they could employ more staff or make their supply network more robust. At the moment, power companies do not even have to offer discretionary compensation in extreme cases.

The problem in Wales has been that some people are finding their power out for long periods, such as three days or more. This can cause problems for hotels for instance, who have large supplies of frozen food that they have. These hotels are popular, but after the storms in October 2002, some hotels were out of electricity for 3 or 4 days. This means that their frozen food could thaw, costing them maybe thousands of pounds.

The reason this affects home insurance is that the only way to cover the cost of frozen food is through contents insurance. The electricity companies will not compensate you for the loss of supply through the effects of a storm, so the only way to cover the food lost is to claim on home insurance, which will push up your premiums. You should make sure the level of cover you have is relevant to the risk that you will need this cover.

The whole issue has been brought to a head by the October 2002 storms, because of the damage that they caused both in terms of the effects of flying debris and falling trees, but also because of the effect on power supplies. The loophole that makes power companies not liable for the loss of electricity to their customers for over 18 hours if it is caused by storms could be closed.