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Trouble getting flood insurance?

According to the National Flood Forum more than five million households throughout England and Wales may be at risk of flooding. Flood insurance may be needed to get the right cover in place.

The winter of 2013 and 2014 illustrated only too clearly the devastating effects for many households of flooding and other storm damage. Indeed, according to a report in Govtoday in March this year, insurers looked set to having to pay out some £1.1 billion in flood claims alone.

The scale of the problem and the cost of providing affordable insurance to people at risk of flooding is immense, according to a recent report in the Financial Times on the 26th of June 2014.

Government action

In response to the problem of trying to ensure affordable insurance for homeowners affected by or likely to be affected by flooding, the government is working with the Association of British Insurers (ABI) on establishing a not-for-profit reinsurance scheme to underwrite the risk borne by insurers.

The scheme is called Flood Re and, subject to the agreement of the parties involved, may provide insurers with compensation for flood claims paid to their insured customers. Further reading is available here.

The scheme is in danger of foundering because the insurance industry as a whole regards it as largely unworkable.

So where does that leave you?

With so many households identified as being at risk of flooding, how might you go about assessing the risk as it faces you? The question is an important one since many insurers may be making it difficult for those in high risk areas to arrange cover at all, or if they do so, only at a considerably high cost of premiums.

As a first step, you may want to consult an insurance provider – such as ourselves at GSI Insurance – with experience and expertise in arranging insurance for property in flood risk areas.

The second step might be in doing some of the research which is currently available from the official Environment Agency website. The site provides searchable maps showing risks of flooding from:

  • rivers and the sea;
  • surface water; and
  • reservoirs.

Still more detailed information may be obtained by writing to the Environment Agency to request the particular flood history in the vicinity of your property. This may be done simply by providing the address of your property; a map showing where it is located; and your address and telephone number. A flood risk report is also available from the Land Registry.

If you think your property is in a flood risk area and you want to arrange flood insurance, you may find that the insurer asks for an Insurance Related Request Letter. The letter is issued free of charge to individuals and contains the following information:

  • if the property is located in a flood risk area;
  • the likelihood of the area being flooded;
  • the protection afforded by local defences against flooding; and
  • whether there are any further flood defences planned for the future.

The problem of flooding in many areas of the country has attracted a good deal of attention in recent years – not least from those householders immediately affected. Flood insurance may be becoming more difficult to secure for those with property in flood risk areas, but there are specialist insurance providers with the experience and expertise in finding the most appropriate, and price competitive, cover.

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