Homeowners hit by the floods caused by Storm Desmond in Cumbria could see their already pricey insurance bills rise further.
Under an agreement between the Government and insurers, homeowners are supposed to be able to purchase policies that include cover for flood damage from their existing provider. However, there is no cap on costs and residents in the area have previously reported being quoted £2,000 per year and policies with excesses of £20,000. Some were turned down completely.
This area has been affected before – in November 2009, 314mm (12.3in) of rain fell on the market town of Cockermouth. The River Cocker rose by 2.5m (8.2ft) and flowed down Main Street. Water reached over halfway up the windows of some shops and volunteers at Wordsworth House rushed to move furniture and exhibits to higher floors. The total cost of damage was calculated at £276.5m.
In 2013, a new flood defence scheme was opened, designed to last 100 years. The 115-metre-long barrier along the River Cocker can be raised by one metre and a Government minister said it would “give residents peace of mind for the future”1.
In nearby Keswick in 2009, water levels on Derwentwater rose to the eaves of the boathouse near cruise boat jetties that were completely submerged. Part of a building collapsed into the River Greta.
Keswick’s new £8m flood relief scheme, with walls, embankments and three floodgates, was completed in 2012. Part of the scheme is a series of glass panels on top of a wall that follows the river. The panels raised defences to around 2.5m. On Saturday, water flowed over the top of the panels and residents took shelter in emergency centres as they’re homes flooded.
Insurers say it is too soon to estimate how much the weekend’s floods will cost the industry. One of the UK’s largest home insurers, Aviva, has been knocking on customers’ doors in affected areas. It states that claims are still “within manageable levels”, but it will take some time to assess the impact.
Claims Director for Aviva, Dave Lovely, comments: “Aviva has been on the ground throughout the weekend, helping a number of customers who have already been flooded and providing advice to those who might be at risk.
“On top of the response we provided yesterday through visiting all impact customers, we continue to visit customers today where we can physically get to them and we have an Aviva presence at each of the rescue centres to provide support.”1
An Association of British Insurers (ABI) spokesperson says that for insurers, this flooding was “not an extraordinary event”.
They continue: “For insurers, this is the type of weather they expect during the winter months and [they] are geared up to deal with these events. The priority for insurers is to help affected customers and several already have people on the ground in the area doing that.”1
An insurance expert at comparison website MoneySuperMarket, Kevin Pratt, says that because the affected areas have already been hit by flooding recently, the cost of insurance is already high.
“People will be expecting more bad news on top of what is already a grim situation,”1 he claims.
From April, a new scheme called Flood Re will allow insurers to pass on the risk. The flood element of a home insurance policy will be placed in Flood Re and the insurer will pay a premium according to the property’s Council Tax band – from £210 for band A homes to £1,200 for band H properties.
It is expected that insurers will use the scheme for the 1-2% highest risk properties in the country, believed to be around 350,000 homes, which would have struggled to find affordable cover in a normal market.
In November, the ABI said that estate agents, property portals and new build developers should use a traffic light system to indicate how susceptible a home is to flooding for prospective buyers.
Have you got rental properties in the affected areas? Make sure your landlord insurance policy covers this damage.