It’s not long since we had the latest round of flooding in the UK and I remember when it hit.
As I watched the news that night I couldn’t help thinking “Here we go again.” and “This is just getting worse and worse, we should have seen this coming”. I doubt I was alone!
For many years property developers (in conjunction with local authority agreement) have been encouraged to build in areas that have previously been known as flood plains. So it should hardly be a surprise that they are now flooding again.
Add to this some consideration for climate change and you might begin to wonder how we find ourselves in this position.
Working closely with insurers and insurance brokers every day I am very familiar with insurers’ views on covering things which are rapidly becoming a certainty rather than a risk – so I thought I would dig a little deeper.
Some of the figures are pretty worrying in terms of what has already been paid out over the last 10 years. Here are some statistics that might make you ask yourself just how long can this go on…
- Flood claims since 2000 have increased by over 200%.
- One in six homes are currently at risk of flooding.
- Nearly 500,000 homes face a significant flood risk and this is expected to rise beyond 840,000 by 2035.
- The amount paid by Insurers since 2000 now exceeds £4.5 billion.
These are worrying figures indeed and one has to draw the conclusion that this cannot and probably will not be allowed continue.
When you then look at this in conjunction with the government’s recent announcement to cut spending on flood defences we appear to have a disaster just waiting to happen.
Many people will of course think that none of this really matters as I have flood insurance – indeed you probably have – but for how much longer ?
An agreement was reached between the Insurance Industry and the Government a few years ago to ensure that flood cover remains available to all existing customers. Note the word ‘existing’; this insurance won’t be much use when you want to insure a property in a known flood area for the first time!
What has also largely escaped the news is that this agreement expires at the end of June 2013 and at present insurers are under no obligation to extend this. And they are not very likely to do so when claims continue to rise and the government is not investing in flood defences.
If something becomes a virtual certainty it is not the sort of thing that insurers will cover and that certainly appears to be what is happening.
Not being able to obtain flood insurance will make some properties unfit for sale, as potential purchasers will not be able to secure a mortgage or advance against a property that is not fully insured.
The outlook is bleak: a vicious circle of house sales down, no upturn in the economy, no extra government money to spend on flood defences, more flooding, yet more claims and finally no more flood insurance for anyone who needs it.
Unfortunately the decline in government spending will impact on the insurance premiums that customers have to pay to insure their homes. However many specialist flooding insurance will state that prevention can help reduce the costs and damage to possessions. Although it is near on impossible to make a property entirely flood proof, there are measures that can be taken to reduce the damage a flood can cause. This includes quite straight forward things such as keeping valuable (and sentimental) items, a good distance from the floor, fitting non return valves to drains and water inlets and fitting water resistant skirting boards. Unfortunately flood proofing a home isn’t often cheap, but it can help reduce premiums and simple things such as having tiled or vinyl flooring as opposed to carpets can save people money because typically after a flood carpets have to be pulled up and replaced.