Flood Risk Insurance

There appears to be little doubt that global warming has played a significant role in changing the face of our weather. The news seems to report with ever more frequency of extreme weather conditions wreaking havoc somewhere in the world. From hurricanes to tornadoes, from droughts to floods, they all appear to be on the increase. However, for the majority of us in the UK there still seems very little to worry about when it comes to our property, belongings or personal well-being. But for a small minority there are very obvious concerns. These are the homeowners with property in and around flood risk areas. To them any severe weather condition will dramatically increase the chance of their home being flooded. Although floods have been a natural occurrence in the UK for centuries, this climate change might be all that's needed to support mother nature in delivering storms of greater intensity and higher frequency. And for homeowners with property in many of Britain's flood risk areas this can be quite a disconcerting thought.

Apart from water damage, one of the main concerns facing homeowners with a property on the flood plain is home insurance. It's probably the same for anyone thinking of buying a home in a flood risk area too. You may read about the current situation for obtaining flood risk home insurance in another of our useful guides.

Property Values in Flood Areas

At least 5 million people in the UK live in flood risk areas and face all the negative aspects this can bring. For one thing house prices can tumble by as much as 15% in these high risk areas, even more so if the house is deemed unsaleable due to insurance problems. Since mortgage providers demand you have buildings insurance before offering you their mortgages the inability to get house insurance could literally make these properties impractical for any buyer. Essentially, this could wipe up to 80% off the property value in one fell swoop.

Some homes in the flood plain area will simply be too much of a risk for the insurance companies to take on, and so finding insurance to cover them will be an uphill struggle. Even if you do manage to get insurance to cover the home the chances are you will be paying up to 60% more for your premium. Add to that higher excess levels, often in the thousands, and you begin to get a clearer picture of the stigma attached to homes in flood risk areas.

The Insurance Good News

Of course it's not all bad news, and although house buyers are becoming more environmental savvy so too are the insurance companies. Where once they would base insurance premiums on postcodes they now have more accurate data at their fingertips. As technology improves so does the amount of things we can do with it, and with some high tech equipment the environmental agency was able to formulate a flood risk map for England and Wales. With this map insurance companies can now pinpoint with greater accuracy the flood risks attached to individual houses in the UK. It gives an overall assessment of the risks to homes from swollen rivers and coastal areas prone to flooding. It was this data that enabled 100,000 homes in the UK to have their at risk status removed, and there's no question that these properties now enjoy much cheaper home insurance because of this.

The Flood Map

In reality few homeowners in high risk areas are ever left without insurance altogether, but they usually have to negotiate special terms with insurance companies to access cover. Being in a flood risk area does not necessarily mean your home will be flooded, though. It takes many contributing factors to fall into place at exactly the right time to create the conditions, and sometimes this might happen only once in every 50 years or so. But the flood map takes all this into account and categorises houses either low, moderate or high risk. It even identifies flood defences that offer protection from rising waters in high risk areas. Although, no matter how good these are they still only ever reduce risks and not altogether eliminate them. However, with such precise data like this it has given developers, home buyers and insurers a better understanding of the risks attached to specific properties and flood prone areas.

Tips for Insuring Homes in Flood Risk Areas:

If you're considering buying a home in a flood area ask the current owners who they have house insurance with. It might then be worthwhile getting a quote from this insurer as you already know they are willing to give cover.

You can buy personal flood water defence systems that protect doors and openings to your home. If you do buy these make sure they have the BSi kitemark accreditation. This will ensure you are buying systems that are thoroughly tested and reach the highest standard.

If you are considering buying a property in a flood risk area check on any future plans for flood defences in that area. It could be that measures are in hand to reduce the risk of flood to homes in that area. Although this won't guarantee 100% protection it will, however, reduce the risk considerably and possibly reduce home insurance policies in the area.

The flood risk map is not only available to insurance companies but also to the general public as well. You can access the map by visiting

www.environment-agency.gov.uk (UK)
www.sepa.org.uk (Scotland)

The environment agency also operate a Floodline where you can get advice and hear flood warnings for your area. The number to call is: 0845 988 1188