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Providers sound alarm over soaring insurance costs

20 August, 2020

A Yorkshire care provider has called for urgent Government intervention after finding his care home insurance costs had escalated by 80% as a consequence of the Covid-19 pandemic.

Mike Padgham said he was initially quoted up to an 880% increase in insurance premiums to get cover for his nursing home and three care homes at Saint Cecilia’s Care Group in Scarborough.

“Our previous insurer, like many others, has stopped offering cover to care providers because the risk is too great,” Mr Padgham said.

“Those that are offering cover are charging huge premiums because of the risk involved and because they know that we have to have insurance.”

Saint Cecilia’s previously paid £10,000 per year but when it came to renew they were initially quoted £98,000 – an increase of 880% or £41,000, an increase of 300%. It was only after a seven-day extension past their renewal date that they finally received a quote for £18,000, an increase of 80%. Even with the increase in cover premium, the company won’t be covered for Covid-19 in the future.

Mr Padgham says the government must intervene and support care providers who are effectively being penalised for helping the fight against coronavirus.

“I do have some sympathy with the insurance companies because they’re worried about the risk, which is why I want the government to step in and help the industry,” he said.

“We stood up and accepted discharged patients into our homes from hospitals, aware of the risk but willing to do so to provide care to people with the virus and to keep our provision viable. Now, because of that, we cannot get insurance without paying premiums that will put enormous financial strain upon our business.

“We want to play a part to help the government if a second wave of coronavirus does come, to admit people and to help them. But we’re not going to be covered for that in the future if that’s what happens. They say ‘we’re all in this together’ but in reality some of us are and some of us aren’t. Social care has been left out and forgotten again.”

The National Care Association surveyed 68 homes that needed to renew their insurance and discovered that 68% of those surveyed had an increase in their insurance premium; 35% had to change insurance provider and 93.5% had no Covid-19 cover included in their renewal.

The call for government support has been echoed by provider representative body Care England whose chief executive, Professor Martin Green, said some of the association’s members had reported that their insurance premiums had risen exponentially as a result of the Covid-19 pandemic.

“ It is essential that the adult social care sector is funded and supported accordingly,” said Prof. Green.

“Also it is imperative that the government considers what policy mechanisms and guidance are at its disposal to support the frontline, for example the indemnification of the sector and local support strategies. With care homes being under such immense financial pressure at the moment this could spell catastrophe.”

Mike Padgham

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