13 June 2012 “This is Money” report says “As flooding hits Britain again, homeowners face big bills and a timebomb ticking for future insurance cover. Already some customers are finding they are being quoted huge flood excesses of as much as £10,000 and extremely costly premiums”.With more than 40 flood warnings in place across the UK and flooding in central and western Wales and across South East England, homeowners are being warned about the future of their insurance.
As well as predicted increases in home insurance premiums, a potentially far more serious timebomb awaits some of those more severely affected.
As many as 200,000 homeowners who live in the highest risk properties could lose their insurance altogether, or see premiums and excesses run into tens of thousands of pounds as soon as June next year.
Insurance time bomb: more flooding could spell serious trouble for the future of home insurance.
According to recent claims data from Lloyds TSB, flooding causes an average of £17,000 damage per incident.
With costs like these being largely shouldered by the insurance companies, it will put pressure on future home insurance premiums, according to business advisory firm Deloitte.
Ian Clarke, insurance partner at the company, said ‘Previous experience has shown that wide scale flooding has a significant impact on the level of claims borne by insurance companies and in recent years has tipped them into losses for their household accounts.
‘The overall impact of this will almost certainly be further premium rises for policyholders as insurers seek to recover the losses they have made.’
But much more seriously, a voluntary agreement by insurers to continue offering flood cover will expire in June 2013 and there is huge uncertainty about what, if anything, will replace it.
Flood cover is provided under the voluntary ‘Statement of Principles’ first signed by insurers in 2000. Under this, insurers will provide cover provided the Government continues to invest in flood defences to protect communities from a one-in-75 years flood.
Properties built since January 2009 are already exempt from the deal and while others are faced with an agreement while forces insurers to provide cover but does not limit what it can cost or what might happen to excesses.
Already some customers are finding they are being quoted huge flood excesses of as much as £10,000 and extremely costly premiums.
Insurers fear that the effects of climate change will make extreme weather more common and they are reluctant to carry on offering to cover future flood damage.
The Association of British Insurers says the agreement was always intended to be nothing more than ‘a sticking plaster’ and is negotiating with the Government over what happens from June 2013.
What to do if your home is at risk from flooding
Prevention is always better than cure, so if your area is threatened with a flood warning, make some preparations before it’s too late.
Tim Downes of Lloyds TSB says they ‘are advising homeowners who are at risk to take steps now to reduce the risk of damage to their homes, and to monitor local news and weather updates’.
Their advice to homeowners who think their property is at serious risk is to:
Move valuables and sentimental items upstairs or to higher ground.
Empty downstairs cupboards and drawers and move the contents to somewhere higher up
Unplug electrical items and store them as high as possible
Disconnect pipes to washing machines and dishwashers to avoid damage if appliances move during the flood
Similarly, either weigh down furniture with sandbags to prevent it causing damage, or if possible move it upstairs.
Turn off water, gas and electricity at the mainsPlace sandbags outside doors, airbricks and windows to reduce the water entering your property
Householders who are concerned their homes may be at risk of flooding can register for Environment Agency Floodline Warnings Direct by calling 0845 988 1188.
What to do if you home is flooded
Contact your insurer as soon as possible to report the damage to your home itself and any contents
Keep any ruined items for insurers to inspect should they need to
Take photographs of all the damage if possible as this could help to settle a claim
Commission any emergency pumping or repair work as soon as possible. This can be done without insurer approval, but make sure you keep all the receipts.
Ensure mains suppliers of water, gas and electricity have been checked for damage by a qualified engineer before reconnecting them.
Check with your insurer if you have to move into alternative accommodation – this is usually covered on your home insurance policy. Make sure you provide the alternative address so your insurer knows how to contact you.
Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2158217/As-flooding-hits-homeowners-face-insurance-timebomb.html#ixzz1xi5aOrbv