The clean-up continues in flood-affected regions of the UK this week as insurers clarify their expected losses.

Risk-modelling service Risk Management Solutions (RMS) estimates the total insured loss from floods throughout England and Wales in June and July at £3.25 billion ($7.76 billion).

It says insurers – whose initial loss estimates were about £1.5 billion ($3.58 billion) – could face unexpected claims from areas considered off the floodplains of major rivers.

Senior Director of Model Management Claire Souch says many insurers would have calculated their exposure according to maps that considered only river and coastal flooding.

“The recent events highlight that flooding due to heavy rainfall in areas with inadequate drainage or from minor streams can have dire consequences. Those insurers that have only taken account of their risk exposure from direct river flooding could face an unexpected deluge of claims.”

British insurers should also begin preparing for a substantial number of business interruption claims.

RMS says there may be “demand surge” for goods and services vital to the recovery process. This short-term inflation could push up the total cost of claims even further.