MPs criticise insurer response to Galpin’s Road gas explosion

MPs have criticised insurers over their response to the Galpin’s Road gas explosion that killed a young girl and forced hundreds of people to leave their Thornton Heath homes, some of which have since had to be demolished.

Speaking during a sweeping Treasury Committee hearing on insurance, Siobhain McDonagh MP, the Labour representative for the Mitcham and Morden constituency in which the August 2022 blast occurred, took aim at slow response times to the emergency situation and claims barriers.

The local authority has spent around £2 million on alternative accommodation costs despite many displaced individuals having had buildings insurance in place, according to McDonagh.

“Nearly all those people were owner occupiers with building insurance, but it wasn’t the insurance companies who set up the emergency resource centre or found out how those people would have somewhere to live or had any clothes on their back,” McDonagh said.

The MP gave examples of people being told they could not be supplied with a courtesy car despite police cordons barring access to theirs, and others who were not provided with temporary accommodation by their insurer because loss adjusters had not yet inspected the premises. She also gave the example of insurers demanding receipts for contents from a man whose wife was severely burned, despite the house having “fallen down” months ago.

“People couldn’t get what they were paying for, they couldn’t get emergency services, and that was universal across the companies,” McDonagh said. “How can that be right?”

 The MP also flagged underinsurance issues, with some policyholders facing unexpected bills for contents and their buildings, and this having a knock-on effect preventing others in terraced houses from getting their homes back.

“A number of houses had to be knocked down, because they were structurally unsafe, and so in a terrace, you’ll get somebody who’s insured for a million pounds to replace their property and the people on both sides are insured for half a million,” McDonagh said.

“To clean and prepare the site, and then build the houses, the people insured for half a million pounds are not going to get their four-bedroom houses back, and the person in the middle of the terrace [who was] properly insured can’t do it, because the others can’t.”

Some policyholders have been fearful of claiming on their insurance due to anticipated premium cost rises as a result, insurer bosses were told.

“They’ve lost everything they worked for, through no fault of their own – and one of the constant feedbacks the council would get at its public meetings … is people saying, ‘I don’t want to claim on my insurance, because I don’t want my premium to go up’,” McDonagh said. “‘I [the policyholder] didn’t cause the gas explosion, how fair is it for my premium to be increased?’”

The Galpin’s Road case was later raised in proceedings by Rushanara Ali MP, who called for an insurer inquiry into loss adjuster accountability.

“We would have examples where there have been very significant floods in parts of the country and we have made sure that there is an emergency response there so that people can be supported on the ground,” Clark said. “In this instance, in this example, as you describe it, the response doesn’t feel acceptable, but I’m not aware of the details.”