Home Insurance and Flooding

You may think that flood defences are enough to protect property owners from high insurance costs, but those living in flood-hit parts of the country are telling a different story.

The Government forked out around £23m on defences in June in the town of Morpeth, Northumberland after serious floods in 2008 and 2012. However, some homeowners near the River Wansbeck still face huge and sometimes rising insurance premiums.

Ian Lavery, the Labour MP for Morpeth, has raised the issue with Parliament, specifying the case of Christine Telford, who was quoted between £3,000-£4,800 for cover, with an excess of £7,500, despite having never been flooded or making a claim.

Lavery states: “Insurers should acknowledge the [defence] investment and give people living alongside the river access to reasonable premiums.”1

One couple, Tim and Suzanne Pinkney, saw their premiums soar by a whopping 500% after floods ruined their home in Morpeth.

Tim remembers: “They shot up from about £250 a year for contents and buildings to £1,500 with an excess of thousands of pounds – that was seven years ago. After several years with no claims, our premiums fell, only to rise again this year, despite flood defences being built in the town.”

The couple have two sons – Max aged seven and Toby aged four. They found themselves “chest height in water” when their two-bedroom house flooded in 2008.

Tim says: “It was dreadful – we had two hours warning before the water hit, but were out at the time. By the time we got home, we had about ten minutes to move the furniture. In the end, we were rehoused for about ten months while our home was repaired, with our claim totalling around £70,000.”

The household has stuck with their insurer, Churchill. Tim explains: “Nobody else will insure us, but we were frustrated when our premium rose suddenly this year, after more than five years’ no claims – we got it down to around £780, but that’s only because we’re a long-term customer. And we had to strip the policy to its bare bones to do so.”1

Home Insurance and Flooding

Home Insurance and Flooding

Churchill comments on the case: “The flood defences in the Pinkney’s vicinity have only recently been upgraded, but our models are regularly updated using the latest Environmental Agency data. However, as we have seen in Carlisle, flood defences can still be overcome and the property may still be at some risk of flooding.”1 

The Pinkney’s experience is not rare, however. Thousands of property owners in flood risk areas are facing spiralling insurance costs. And the issue is growing. In the last decade, the country has been hit by a series of devastating floods, the latest of which – Storm Desmond – has left thousands of people homeless in Cumbria and Lancashire.

And many are speaking up in trying to protect homeowners from high premiums as they rebuild their homes and lives.

Chief Executive of the National Flood Forum, Paul Cobbing, says the situation in Morpeth is unacceptable: “Any flood defences need to be put onto the national database, but this isn’t being kept up to date, which is a big problem.”

The Association of British Insurers (ABI) says insurers should take any measures that reduce the risk to a property, including flood defences, into account.

But Director of General Insurance at the ABI, states: “In order to do so, the protection which new defences offer needs to be included on flood risk maps. In the meantime, homeowners can request a letter from the Environment Agency which they can provide to their insurer as evidence.”1

A spokesperson for the Environment Agency says it will provide residents of Morpeth with this letter to explain the impact of the defence scheme.

Cobbing believes there should be better access to reasonable premiums ahead of the launch of Flood Re, which is due to be implemented in April 2016.

This Government scheme will fund the flood risk element of buildings and contents policies for future claims, putting a cap on the amount insurers can charge customers for the flood component of their policy.

One reason for the recent rise in premiums for those in flood risk areas could be that this winter is the last that insurers will face the costs of the worst flood-related claims.

Another factor is insurers’ use of new flood-mapping technology, which highlights areas at risk down to the individual property. Under current rules, insurers must offer cover to existing customers that have previously been flooded or are at risk of flooding under an agreement called the Statement of Principles, as set by the ABI and the Government.

About 5m homes, or a sixth of properties in England, are classed as having a higher than normal risk of flooding. At least 350,000 are considered high-risk and will benefit from capped insurance costs under Flood Re.

Around 9,000 new homes are due for development by local councils on land the Environment Agency considers either at serious or significant risk of flooding, making the new scheme particularly important.

Cobbing advises property owners in a flood risk area to use a specialist broker and/or try some major insurers: “If you are rejected by one insurer on a price comparison site, you may find you’re rejected by them all – they use the same data – so it’s worth calling around.”

Executive Director of the British Insurers Brokers’ Association, Graeme Trudgill, also suggests reviewing your policy when Flood Re is introduced. He says: “Get a new quote and compare this to what you’re paying to see if it’s competitive.”

Generally, buildings policies cover repairs to return your home to a habitable condition as well as for alternative accommodation while the work is conducted. Contents cover replaces items up to the maximum payout limit.

If your property has been hit, Trudgill advises using flood-resilient materials: “This could be putting in plastic skirting boards and tiled floors.”1

But you could also put in solid flooring and electrical wiring halfway up the walls. “They can be quite simple steps, but doing them in combination makes most sense to reduce the impact of any floods,”1 adds Cobbing.

Check your risk of flooding at checkmyfloodrisk.co.uk or through the Environment Agency, where you can also sign up to flooding alerts. Find tips on flood-proofing your home at the National Flood Forum here: https://www.nationalfloodforum.org.uk/wp-content/uploads/Ready-For-Flooding-26-11-14.pdf

Protect your property

  • Clear your gutters of leaves and twigs, and trim trees close to the property. Also, check that they won’t be blown over.
  • Have a tradesperson check your roof for gaps and cracks, and ensure all tiles are secure.
  • Fill in any gaps or holes in the sealant around doors and windows.
  • Cover air vents from the outside and inside with thick plastic sheeting.
  • Unplug all electrical items and store them upstairs if a storm or heavy rain is forecast.
  • Move as much furniture as possible upstairs, along with rugs and curtains. Also, empty cupboards and drawers.
  • Prepare a home emergency kit, containing: sandbags, torches, spare bulbs and batteries, insurance documents, emergency contact details, tinned food, and warm clothing and blankets.

1 https://www.theguardian.com/money/2015/dec/11/flood-hit-areas-residents-battling-costs-insurance


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