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Flood damage and your home insurance policy

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Flooding is often unpredictable and becoming increasingly common in the UK, and it's not likely to get any better. 

Flood sign

It could cause thousands of pounds worth of damage to your possessions, structure and the interior of your home.

Why do I need flood insurance?

Flooding has become a major issue for homeowners in the UK during the last decade with climate change becoming more prevalent.

The UK experienced some of its wettest weather in a century in 2012, according to the ABI. It’s estimated up to 8,000 homes were affected by the increase of flooding. 

The damage caused totalled a whopping £400 million.

This comes as no surprise when figures from the Environment Agency reveal that around two million homes in England and Wales are at risk of flood from rivers and sea. 

Over 500,000 of these homes are at ‘moderate’ risk or higher. The risk of flooding from extreme weather is a real worry for homeowners.

Flood Re from the ABI

The ABI (Association of British Insurers) have just launched a new scheme as of 4th April (2016) called Flood Re.

It’s an initiative to help people who live in flood risk areas get affordable home insurance.

This new scheme is non-profit and has been agreed by the ABI and the Government.

It allows insurance companies to pass any flood risk associated with policies into a fund, and in the event of a claim, the fund will pay the flood claim.

Lots of the big insurers like Legal & General, Admiral, Prudential, Nationwide to name but a few, are part of the scheme.

It only applies to people living in a flood risk area, which the ABI estimate is about 350k people across the UK.

To find out if it applies to you and more about it, visit the Flood Re website.

How a flood impacts your premiums

If you ever suffer a flood in your home, the cost of your insurance premium is likely to rise in the future.

You might also have to pay a larger excess on any claims: in extreme cases, this could be as much as £10,000.

Each company has a different approach when it comes to flood claims and excess. It’s a competitive market, so it’s worth shopping around at renewal to get the best price.

 Protecting the door from flooding

No insurance, no mortgage

While insurers are committed to offering existing customers flood cover following a washout, new insurers are under no such obligation, and are likely to turn you away.

This can raise issues when applying for a mortgage on a property in a flood risk area, or one that has been flooded in the past.

If you’re buying a property, remember to look at flood risk very carefully. 

Lenders require at least a standard insurance policy to cover the structure of the building before they even consider approving a mortgage.

Before buying, get quotes from an insurance company to see whether it will cover you, and how much you have to pay. 

Protect your home from flooding

Flooding is one of the worst things that can happen to your home, and there is little you can do personally to protect yourself. It is up to the local authorities to build adequate flood defences.

You can help yourself by making some preparations like making sure your home and contents are covered by insurance.

Check the flood risk map from the Environment Agency to see if you could be affected, regularly checking for warnings and making sure to sign up for flood alerts with the Environment Agency tool:

 flooding diagram

Or if you live in Scotland, you can visit the SEPA website to check if you're home is in a flood risk area.

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