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For flood-hit areas the problems don’t stop after the waters have receded
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Government pledges to spend billions of pounds on flood defences won’t necessarily shield householders against rising insurance costs in flood-hit areas of the country, despite the protection they offer.
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Around £23m of defences were completed in June in the Northumberland town of Morpeth after major floods in 2008 and 2012 wrought devastation. Yet some householders near the river Wansbeck still face massive and sometimes rising insurance premiums.
Labour MP for Morpeth, Ian Lavery, has raised the issue in parliament, citing the case of resident Christine Telford who was quoted between £3,000 and £4,800 for insurance cover, with an excess of £7,500, despite never being flooded or making a claim. “Insurers should acknowledge the [defence] investment and give people living alongside the river access to reasonable premiums,” he says.
Tim and Suzanne Pinkney, meanwhile, saw their premiums rocket by 500% after floods wrecked their Morpeth home. “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,” Tim says. “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, who live with their sons Max, seven, and Toby, four, found themselves “chest height in water” when their two-bedroom house flooded in 2008. “It was dreadful – we had two hours warning before the water hit, but were out at the time,” Tim says. “By the time we got home we had about 10 minutes to move the furniture. In the end we were rehoused for about 10 months while our home was repaired, with our claim totalling around £70,000.”
The Pinkneys have stuck with their insurer Churchill. “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,” he says. “And we had to strip the policy to its bare bones to do so.”
Churchill says: “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.”
The experience of Morpeth residents reflects the problem of finding reasonable cover for the thousands of homes in flood-risk areas in the UK – and the growing scale of the issue. The past decade has seen a series of devastating floods, with Storm Desmond the latest to leave thousands homeless in Cumbria and Lancashire.
There are calls for more to be done to protect vulnerable householders from huge premiums as they rebuild their lives in the aftermath of floods. Paul Cobbing, chief executive of the National Flood Forum, says the situation in Morpeth is unacceptable. “Any flood defences need to be put on to the national database, but this isn’t being kept up to date, which is a big problem,” he says.
The ABI says insurers should take into account measures that reduce the risk to a property, such as flood defences. But as James Dalton, director of general insurance, says: “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.”
A spokesman for the agency says it will provide Morpeth residents with such a letter to explain the impact of the defence scheme.
Cobbing says there should be greater access to reasonable premiums ahead of Flood Re, which is set to come into force from April 2016. This government scheme will pool the flood risk element of buildings and contents policies to pay out future claims, placing a cap on the amount insurers can charge customers for the flood element of their policy.
One explanation for recent premium rises experienced by those in flood-risk areas could be that this winter will be the last in which insurers face the costs of the worst flood-related claims. The other factor impacting premiums is insurers’ use of new flood-mapping technology, aimed at highlighting areas at risk “down to the individual property”.Under current rules insurers are obliged to offer cover to existing customers who have previously been flooded or are at risk of flooding under an agreement called the statement of principles, set by the Association of British Insurers and the government.
Around 5 million, or a sixth of properties in England, are considered to have 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.
Up to 9,000 new homes are scheduled for development by local councils on land the Environment Agency says is at either “serious” or “significant” risk of flooding, according to Greenpeace, making a scheme to ensure there is cover available particularly vital.
If your home is in a flood-risk area you should use a specialist broker and/or try several major insurers, Cobbing says. “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.”
When Flood Re arrives you should review your policy, says Graeme Trudgill, executive director of the British Insurers Brokers’ Association. “Get a new quote and compare this to what you’re paying to see if it’s competitive,” he says.
Typically, buildings policies pay for repairs to return your home to a habitable condition, as well as for alternative accommodation while repairs are carried out. Contents cover will replace items up to the maximum payout limit.
If your property has been damaged consider doing repairs using flood-resilient materials. “This could be putting in plastic skirting boards and tiled floors,” says Trudgill. Flood proofing a home by putting in solid flooring and electrical wiring half way up the wall will also make a big difference. “They can be quite simple steps but doing them in combination makes most sense to reduce the impact of any floods,” Cobbing adds.
Householders can check their risk of flooding at checkmyfloodrisk.co.uk, or via the Environment Agency, where they can also sign up to flooding alerts. There are tips on flood-proofing your home at the National Flood Forum, and a list of specialist brokers at biba.org.uk.
