The recent flooding in the UK means insuring homes against floods could be much more difficult in the future. Half the areas that have flooded so far in 2012 are not designated “high risk” by the Environment Agency. The severity of flooding means that insurers may face bills at least equivalent to 2007 when flood damage costs were £3.2bn. High claims costs combined with the unexpected extent and location of flooding means insurers will be negotiating harder with the government on the Statement of Principles in 2013.
There was already concern when the government halved planned expenditure in 2008 because of the recession and then announced a further cut of 30% in 2010. These floods demonstrate the devastating impact that under-investment is having on property owners and what a big ask the government is making of the insurance industry.
Lockton’s top tips for flood hit homes include:
• Before the bad weather hits, check what your insurance policy covers, have all documents with you so you can call in damage immediately and turn off gas, electricity and water at the mains supply.
• Disconnect cookers, washing machines, dishwashers and other appliances connected by pipes to prevent damage to them if the appliance floats or moves during the flooding