Flooding and home insurance in the UK

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Every few years we seem to come round to the subject of floods and home insurance across the UK. Despite many warnings in years gone by it seems that governments are inclined to target budget spending at areas other than flood defences. We hear all of the spin on the TV, the articles in the papers but the truth is that spending on flood defences in the UK has been on the decline in real terms for many years now.

There are a number of things you should be aware of in relation to flooding and home insurance in the UK.

How great is the risk?

The Association of British Insurers suggest that 5 million properties in the England have a higher than normal degree of risk in relation to flooding. This is a significant number of properties although interestingly only around 50% are deemed to be at risk from rivers or the sea. The rest are deemed high-risk due to the potential for rising groundwater, problems with sewage and flash flooding. So, while much of the flooding of late has been connected with overflowing rivers there seems to be more to this subject.

Home insurance

Under the terms of an agreement with the UK government your existing insurer cannot refuse to insure your home in the future. However, if there is a high risk of flooding going forward then they can increase premiums to levels which many will not be able to afford. So while in theory they have an obligation to continue insuring your property, in practice they can push prices so high that it is unaffordable for many.

It is also surprising to learn that at least 350,000 properties in the UK have no insurance because of the premiums demanded to cover potential flood damage. These are deemed as “not commercially viable” leaving many landlords to pay for the damage caused by floods which are now becoming more regular.

What is Flood Re?

From April 2016 a new insurer will begin trading with the specific task of assisting with cover for those in danger of flooding. The company is known as Flood Re and is an industrywide initiative which allows specific insurance companies to “share the risk” of flooding on a particular building and contents policy. There will be maximum charges which the company can quote and it is hoped that the estimated 350,000 properties not insured in the UK, because of their flood risk, will be able to obtain cover. It will be interesting to see how this particular initiative performs because it is something that many across the UK have been crying out for.

Ask vendors about flooding risk

Those looking to acquire property in some of the more potentially high-risk flood areas of the UK will be pleased to learn that vendors are legally obliged to inform you of any flooding incidents. The Law Society’s property information form for conveyancing obliges the vendors to make clear any significant flooding incidents. Be aware, recent incidents of flooding could impact your ability to obtain a mortgage and ultimately finance your property purchase. It is therefore vital that you do your research before committing to any purchase.

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