Flood insurance – getting the right cover

Flooding is becoming increasingly common in the UK – and apart from the heartache and hassle, the cost of cleaning up can be huge. Insurance is advisable, but getting cover isn’t always easy – especially if you live in a high-risk area. Here’s the low-down on flood insurance and how to get it at a price you can afford.

What is flood insurance?

Flood insurance is normally included as a standard part of your buildings insurance, but it won’t cover your contents unless you also have a home contents insurance policy. This could be due to a number of events, including:

  • A river or canal bursting its banks
  • Seawater flooding due to storms and/or a high tide, and
  • Surface water or rapid groundwater flooding as a result of heavy rainfall or a burst pipe

What does flood insurance cover you for?

Flood insurance covers the costs of:

  • Drying out, repairing and restoring your property and its fixtures and fittings
  • Repair or replacement of damaged furniture and belongings
  • Removing debris
  • Professional fees (eg solicitors, architects, surveyors)
  • Alternative accommodation while you can’t live in your home

Things you might not be covered for

Replacing all your damaged belongings

Remember

If you’ve been flooded, a good tip is to keep the wrappers from any spoilt food you have had to throw away – it’s amazing how much this adds up to, and the wrappers are accepted by most insurers as evidence of the loss. This could also be applied to other items or contents such as mouldy cloths as a result of the flood.

When it comes to claiming for damaged belongings, the amount your insurance company will pay out depends on the type of contents insurance you have.

  • New for old – If you have a ‘new for old’ policy, your insurance company should pay out enough to replace all damaged items with new equivalent items (other than clothes, where there’s usually a deduction for wear and tear). Most policies offer this.
  • Indemnity cover – If you have this type of policy, you’ll only get the value of your possessions before the flood occurred. So, if your sofa needs replacing at a cost of £2,000, you will only get what the old one was worth, which might only be £200.

Alternative accommodation

The amount of cover insurance companies offer for alternative accommodation varies. We recommend that you take out a policy offering at least £40,000. Any less than this and you might find yourself having to move back into your home before the repairs are finished or footing part of the bill for the alternative accommodation yourself.

Do you need flood insurance?

Did you know?

“There’s nobody that’s not at risk of flooding, even people that live on top of a hill.”

Source: Mary Dhonau, Chief Executive of Know Your Flood Risk on BBC Money Box (July 2012)

Because of the high cost of clean-up and repairs following a flood, it’s important to have insurance for your home and its contents.

  • Your mortgage company usually insists on you taking out buildings insurance, which will often include flood cover
  • If you rent your home, it’s your landlord’s responsibility – not yours – to have buildings insurance
  • Although contents insurance isn’t compulsory, the cost of replacing everything in your home would be so high that it’s almost always a good idea to have contents cover

Check whether you’re covered in the event of a flood

Check all the details in your buildings and contents insurance policies that relate to flooding and make sure you have enough cover to protect you in the event of a flood. Even if your insurance isn’t up for renewal, it’s worth checking. Call your insurance company to query anything you’re not sure about.

New laws mean that it’s up to insurance companies to ask the right questions about what they want to know. But if your property has a history of flooding, it’s wise to tell your insurance company – even if they don’t ask. The last thing you need is a hitch if you ever need to make a claim.

Trouble getting flood insurance?

It can sometimes be difficult to find insurance cover if:

  • Your property has suffered from flood damage in the past
  • There’s a history of flooding in your area
  • You live in a flood risk area

Even if you do find an insurance company that will cover you for flooding, they might charge a very high premium or set a high excess (the amount you have to pay in the event of a claim).

The current agreement between the government and the insurance industry helps keep flood insurance affordable. This agreement is expected to continue until the government and the industry can agree on an alternative solution. Talks are ongoing, but with no resolution yet, many people are worried about whether they will be able to afford their insurance when it comes up for renewal.

You’re insuring a property for the first time

According to principles set out by the Association of British Insurers (ABI), insurance companies must continue to offer flood cover to properties, even if they are at significant risk of flood, as long as the Environment Agency plans to reduce the risk within five years.

So if you want to buy a property in an area at risk from flooding, the seller’s current insurance company is committed to offer cover to you as the new owner of the property (subject to satisfactory information about you).

However, there is no guarantee that the cost of the premium will be set at a level you think is reasonable and can afford.

You’ve recently been flooded and are renewing your insurance

There have been reports of insurance companies routinely trebling the premium or the excess following a flood claim. (Source: The National Flood Forum)

Find out more about what you can do in the sections below.

Your renewal premium has suddenly gone up but you’ve never been flooded

Other consumers have complained that they have been quoted high prices simply because they share a postcode with houses that are at a high risk of flooding – even if their home has never flooded. (Source: BBC Money Box July 2012)

Find out more about what you can do in the sections below.

Get specialist help

If flood risk is an issue for your property, it’s best to bypass the comparison sites altogether and get some expert help.

Use a specialist broker

An insurance broker can help you negotiate with insurers and arrange cover, even if the risk of flooding is high. The British Insurance Brokers’ Association (BIBA) can help you locate an insurance broker who specialises in flood risk.

Brokers don’t normally charge you a fee for their services – they get paid commission by the insurance company instead.

Talk to the National Flood Forum

The National Flood Forum is a national charity giving independent advice on how to go about getting flood risk insurance. They also publish a list of ‘flood friendly’ insurers.

Call the National Flood Forum on 01299 403055.

Know your risk

The more you can find out about the flood risk to your property the better. Here are some things you can do.

Check your risk on a flood map

Find out whether you’re at risk from river or coastal flooding where you live.

If you live in England or Wales, check the flood map on the Environment Agency website.

If you live in Scotland, check the flood map on the Scottish Environmental Protection Agency website.

If you live in Northern Ireland, check the flood map on the Department of Agriculture and Rural Development website.

If you’re insuring a property in Scotland, it’s worth knowing that the Scottish Government does not allow insurance companies to use this information when setting insurance premiums.

If you live in England or Wales, you can contact your local Environment Agency office to ask for additional information on the level of risk in the area where you live.

You can ask the Environment Agency for what’s known as an insurance-related request letter. These are free of charge and include details such as:

  • The most recent National Flood Risk Assessment that was carried out
  • Any flood defences and the level of protection they offer
  • Any planned improvements to reduce flood risk
  • Any dates when the area was previously flooded

Pay for a ‘flood risk assessment’

This will help present your risk profile to insurance companies in the best possible light and will highlight things you can do to reduce the risk. To increase the chance of insurance companies being able to make use of the information, make sure that the survey is as detailed as possible, and includes facts and figures about the level of flood risk to the property.

You can look up companies who will be able to provide an assessment on The Blue Pages directory website and on the Flood Protection Association website.

Reduce your risk – and hopefully your premiums

Be proactive. There are things that can be done to reduce your flood risk including:

  • Signing up for flood warnings
  • Joining a flood action group
  • Lobbying for improvements to flood defences locally (working with your local authority and get involved in public consultations)
  • Considering installing products, such as flood boards and air-brick covers, that can keep flood water out of your home
  • Making the inside of your property more resilient to flood water.

Before you invest in adapting your property, it’s worth checking out what’s happening locally with large scale flood defence work. Supporting any initiatives like this might be a more effective use of your time.