Obtaining flood insurance in high risk areas

July 29, 2014 by remusmanagement 4 Comments

Insure Yourself from Flood Risks

 

Introduction

 

It is estimated that there are 5.2 million properties at risk of flooding in England. Of these, 1.4 million are at risk from rivers or the sea alone, 2.8 million from surface water and 1 million are at risk from both1. If your property has suffered from flood damage in the past, if there is a history of flooding in your neighbourhood or you are within an identified flood risk area, it can sometimes be difficult to find insurance cover. This guide aims to provide, in one place, information that will help you to obtain a suitable policy. It explains how to get specialist help and what information you may be asked to give, provides tips on how to reduce the impact of flooding and the last section of the guide provides useful information on key organisations – their responsibilities and contact details and relevant websites for further reading.

The need for insurance

In most cases, flood insurance is part of your buildings and contents insurance. Remus Property Management suggests property insurance safeguards your most valuable assets, your home and its contents; it covers damage to homes and businesses caused by a sudden, unexpected event such as fire, storm or flood. Mortgage providers and other lenders expect you to have buildings insurance in place to cover any property against which you secure a loan. Being unable to secure an insurance policy could have implications for your mortgage and could make it more difficult to sell your property.

If your property is flooded, buildings insurance usually covers the costs of drying out, repairing and restoring your property and its fixtures and fittings. It also covers items such as the cost of removing debris, professional fees (e.g. legal fees, architects, surveyors) and other charges incurred as a result of the flood damage. Most buildings policies will cover the cost of alternative accommodation too: it can often take many weeks or months for flooded properties to be made habitable again. Contents insurance covers the cost of repair or replacement of damaged furniture, equipment and other belongings. Business policies may include business interruption insurance to help protect income until the damage is repaired.

The availability of flood cover

The UK insurance market is extremely competitive so you should always start by obtaining several quotes. The majority of insurance policies can be obtained through an online form or by telephone. Insurance premiums and terms and conditions reflect an insurer’s assessment of the likely incidence and severity of the flooding. Areas at risk of flooding may therefore have higher premiums and excesses (the amount you must pay towards the costs of repair) to reflect that risk. Insurers’ assessments of risk can change meaning some people could see their premiums or excesses rise, but they also may fall. Insurers do not guarantee to provide cover in all circumstances and some insurers may consider your risk to be unacceptable to them. The cost and availability of insurance may even vary within individual streets as different insurers will want to limit their exposure to claims from any one event.

TOP TIPS when seeking flood insurance:

• Try to discuss any problems or concerns with your current insurer

• Contact a specialist insurance broker who has access to insurers that specialise in flood risk cover

• Contact a range of insurers to ask for a quote

• Understand your risk better by looking at the Environment Agency information online

• Obtain as much information as possible from the EnvironmentAgency or other relevant authority, including an Environment Agency ‘insurance related request’ letter

• Consider investing in a flood risk mitigation survey

• Sign up to the Environment Agency’s Flood line Warnings Direct

• Investigate flood products which would make your property more flood resistant

• Consider flood resilience measures which might be appropriate for your property

• Join a local flood action group via the National Flood Forum or Flood Group UK Facebook page.

The availability of flood cover

The UK insurance market is extremely competitive so you should always start by obtaining several quotes. The majority of insurance policies can be obtained through an online form or by telephone. Insurance premiums and terms and conditions reflect an insurer’s assessment of the likely incidence and severity of the flooding. Areas at risk of flooding may therefore have higher premiums ad excesses (the amount you must pay towards the costs of repair) to reflect that risk. Insurers’ assessments of risk can change meaning some people could see their premiums or excesses rise, but they also may fall. Insurers do not guarantee to provide cover in all circumstances and some insurers may consider your risk to be unacceptable to them. The cost and availability of insurance may even vary within individual streets as different insurers will want to limit their exposure to claims from any one event.

Remus Property Management is a professionally independent firm that manages estate houses and buildings, manage agents and apartment buildings throughout England and Wales.