Where to get home insurance for high flood-risk homes

Is your home identified as being a high flood risk? If so it may be tricky to arrange home insurance, but there are options says money.uk on 8 April 2013. The ABI (Association of British Insurers) is calling for:  a rigorous planning system that prevents developments in high flood risk areas;  sustained, long-term flood defence spending; and Government support to ensure flood insurance remains widely available and affordable.

Flooding has become a regular problem in the UK over the last couple of years. Last year was the wettest on record in England, and was not far short of being the wettest ever across the UK. Of the five wettest years on record, four have happened since 2000.

As a result, home insurance has become a big issue. In 2008 the Government agreed a Statement of Principles with the insurance industry, to ensure that insurance covering flooding would be “as widely available as possible without distorting the market”. In other words, insurers need to offer flood cover as standard in most cases, but there’s no guarantee of cover for properties still at significant threat of flooding.

The Statement of Principles agreement expires in June and as yet there’s no replacement. If no further agreement is made, then according to the Association of British Insurers (ABI), “each insurer will make a commercial decision on renewal of policies, if they wish to insure new flood risk properties”.
My new home is at risk!

This whole issue has taken on a very personal twist for me, with the discovery that the property we are in the process of buying has been identified as a high flood risk.

Why on earth would I buy a house so close to water, at such risk? It’s a reasonable question. But our experience shows just how daft the classification of a high-risk property is. Yes, there is water nearby, a couple of hundred metres away. But it’s a dainty little brook, about six feet below the pavement.

The last time it flooded? 1940. Perhaps I’m just being complacent. But we’d need a hell of a storm to get that brook to reach the pavement level, let alone make it to our row of houses.

Nonetheless, it means that conventional insurers don’t want to deal with us.
So how do you find insurance?

Thankfully, there are still insurers that will consider flood-risk properties. Direct Line for example was happy to provide a quote, though it was pretty steep. You can see if the mainstream insurers are willing to consider you by using our home insurance quote engine.

However, your best bet is probably to look around at specialists.

For example, there’s Magnet Insurance, whose home insurance policies are underwritten by Lloyd’s of London. It has identified a number of niche areas that need insurance cover besides flood-risk properties, including the drug and alcohol rehabilitation sector and model railway enthusiasts!

Bond Lovis Insurance Brokers is another that could help, arranging insurance not only for flood-risk homes but also for listed buildings, those with a history of subsidence, and even for people with an adverse claims history or criminal convictions.

In addition the RK Harrison Group and Adrian Flux are brokers worth chatting with to cover your options. Home Protect, too.

A spokesman for RK Harrison told me that insurers that will deal with flood risk properties will want to know the following information:

What local flood defences are in place?
Has the property ever suffered flood damage? When was it and how significant was the damage?
Is there a basement? What’s stored there?

How much more will I pay?

The cost of your insurance will be pretty steep, whoever you end up with. We’ve had quotes of between £500 and £700 a year, for a pretty modest amount of cover.

According to RK Harrison, you can expect to pay anything from 20% more, in high risk areas that have not previously suffered a loss, to 100% more in properties that have suffered from flood damage while on a particular insurer’s books. It all depends on how severe the previous damage was.
What happens next?

My home insurance is expensive enough as it is, but it will likely get even more punishing if a further agreement between the Government and the insurers isn’t reached.

Here’s what the ABI is calling for:

a rigorous planning system that prevents developments in high flood risk areas;
sustained, long-term flood defence spending;
Government support to ensure flood insurance remains widely available and affordable.

Groupbuying flood insurance?

One insurance intermediary is hoping to tackle the issue a little differently, though. Bought By Many is a firm that has taken groupbuying into the insurance industry, bringing groups of people in the same situation together to negotiate better terms from insurers than you would get as an individual. So far it has arranged pug insurance (yes, really) and travel insurance for people with diabetes, but home insurance for flood-risk properties is next on the list.

It’s certainly one to keep an eye on, particularly if no new agreement is reached.

Go for it - Have your say !!