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200,000 homes in flood areas face insurance crisis

Simon Ward
by Lovemoney Staff Simon Ward on 31 January 2012  |  Comments 3 comments

The Association of British Insurers has warned that homeowners in 92 areas in England and Wales could face huge insurance costs next year.

200,000 homes in flood areas face insurance crisis

The Association of British Insurers (ABI) has published a list of areas where homeowners are likely to face difficulties getting home insurance due to flood risks.

At the moment, the Government has an agreement with insurers to provide cover for high-risk properties. However, this ends in June next year and no new agreement has yet been struck.

As many as 200,000 homes could be at risk across 92 areas in England and Wales, says the ABI, which has analysed Environment Agency flood data.

Here are the areas which have “significant flood risk”, according to the ABI:

Area

Number of homes facing significant flood risk

Boston and Skegness

7,550

Vale of Clwyd

7,339

Folkestone and Hythe

7,196

Windsor

7,125

Runnymede and Weybridge

6,541

Clwyd West

6,160

Aberconwy

5,500

South Nottingham

5,043

Great Yarmouth

4,965

Sittingbourne and Sheppey

4,295

Central Leeds

4,209

Canterbury

4,199

Significant flood risk is defined as a more than 1-in-75 chance of flood in any given year.

The ABI is calling for a long-term solution beyond the current Flood Insurance Statement of Principles. It says it is unwilling to renew it as people in low-risk areas pay more to subsidise those in high-risk areas, high-risk customers are tied to their existing insurer and insurers have ended up with a disproportionate amount of high-risk properties.

It is calling for a “risk pooling” approach, with the Government sharing some of the risk.

In November, Hull North MP Diana Johnson said some homeowners in flood-risk areas had seen their home insurance premiums increase by 500%.

The cross-party Public Accounts Committee has questioned whether there is enough money to pay for more flood defences and who pays for them.

More: Compare home insurance policies | How to protect your home against flooding

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Comments (3)

  • bengilda
    Love rating 77
    bengilda said

    When buying a property it is necessary and wise to consider all risks and consult fully with your estate agent and surveyor and,in addition to any other points, clarify the flooding history of the area and the property itself.

    If there is any risk then it is up to the buyer to assess whether or not to buy, taking responsibility for his decision.

    It is not the taxpayers job to provide indemnity against flooding or any other of natures surprises but the owners responsibility.

    I have never and would never buy a property at all likely to be in danger of flooding and do not expect my taxes to pay for those who do. Insurance may well be expensive but who chose the property?

    Where publicly owned property is in a flood zone and is damaged then the planners and councillors who approved the development should be considered personally liable through negligently allowing such development.

    Report on 31 January 2012  |  Love thisLove  1 love
  • CuNNaXXa
    Love rating 362
    CuNNaXXa said

    @ bengilda...

    I wouldn't suggest consulting with an estate agent, as they are purely motivated by money, and will tell you what you want to hear, rather than what you need to know.

    As for consulting with a conveyancer, most would do a flood risk search, or advise to do one, as they do represent your interests.

    Rule of thumb. Do NOT trust the judgement of anyone who earns a commission from a product or service that they sell you. They are motivated by their commission. It is far better to take advise from someone on a flat fee basis, as their advise, product or service they sell, does not affect their fee, meaning they are more likely to make a suggestion in your favour, not theirs.

    Report on 01 February 2012  |  Love thisLove  0 loves
  • PoorTeacher
    Love rating 0
    PoorTeacher said

    We moved into a newbuild (brownfield) townhouse in summer 2006 within 3 mins' more-or-less level walk of the middle Thames: our doc.pack from the developers included obligatory but painstaking surveys of proximity to all kinds of risks such as derelict industrial waste dumps, explosive hazards ... & of course, flooding.

    Among the accompanying illustrative diagrams were 'targets' with concentric circles showing how near or far any such risks lay. Our property is on a slight rise from the basic floodplain, and the graphic obligingly shows how near any waters might lap on a historical basis: the answer is, about 75 metres away horizontally in the maximum case, but there would need to be probably a further depth of almost a metre of water beyond that for there to be any risk at all of it reaching our doorstep or foundations. That much of a Thames flood would be completely unheard-of.

    But because the front few characters of our postcode are tarnished ~ yes, people from just about within sight of our upper windows were evacuated precautionarily in the floods of 2007, during which we couldn't directly see any surplus water from off our property ~ we have potential problems with FI.

    Our mortgage co are quite happy for us to be here, yet their insurance arm wouldn't offer us cover (we assume they don't speak to one another much, & haven't pointed this out; we're still insured elsewhere).

    Dunno whether other LM-ers have had similar experience?

    Report on 03 February 2012  |  Love thisLove  0 loves

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