Home Insurance. Flood Alert

The Royal Institution of Chartered Surveyors warns that if you can't get insurance for your house, you're in big trouble. Mortgage lenders won't lend on houses that are uninsurable and as a result its value could fall by up to 80%.

It's a high flood risk that's most likely to make your house uninsurable. According to a recent survey, 6.5 million homes are already at risk from flooding of which 1.5 million are in high risk areas. The government has completed flood defences in many such areas and protection for a further 80,000 homes is due this year. But concerns have also been expressed about a further 120,000 new homes planned for the Thames Gateway which are potentially in a high “at risk” zone. Yet many areas remain vulnerable. And if global warming continues, by 2030, the 1.5 million at risk could mushroom 3.5 million. Back in 2003 the Association of British Insurers (ABI) agreed the principles which committed UK insurers to offering home and contents insurance for properties in areas which are assessed to be at a flooding risk once in seventy five years or more. The rider was that the flood defences had to be already in place or would be completed by the end of 2007.

The Department for Environment, Food and Rural Affairs (DEFRA) has the responsibility of developing and maintaining these flood defences but within the insurance industry there's widespread concern that insufficient progress is being made. As a result the insurers have has warned the government that there could be widespread withdrawal of insurance cover if progress is stepped up.

In the mean time, those in areas threatened by flood water could find their insurance premiums soaring. Whilst the insurance industry agreed to provide insurance cover, their commitment was simply to maintain premiums at “reasonable” levels. But there was no definition of what “reasonable” means. As a result premium increases of 60% have been common with up 400% increases in bad areas. In a tiny number of cases, cover has been withdrawn altogether, mostly in country areas where DEFRA considers the cost of defending a cluster of a few homes to be uneconomic.

Environmentalists warn that unless DEFRA gets it's skates on, the UK 's current bill for flood damage could rise from £950 million a year, to £3.2 billion. After all, the average insurance claim for household flood damage is £30,000 – that's even higher than fire damage. And localised events like the 2004 flood at Boscastle, Cornwall , can cost the insurers over £15 million.

If you are in any doubt whether your home or proposed home, is in a flood risk area, you should visit www.environment-agency.gov.uk. This is DEFRA's web site where you can check whether they think your home is at risk of flooding. Their maps were originally designed for planning purposes and provide information on a post-code basis.

Whilst many insurers use the DEFRA information, others like More Than, have their own flood maps. These assess homes individually rather than post code areas. This means that if your existing insurer increases your premium for flood risk and uses the DEFRA information, you may still be able to get a cheaper rate from an insurer using it's own flood data if its data identifies that your property is beyond the “at risk” zone.

The ABI has recently added to the pressure on DEFRA to accelerate the building and upgrading of flood defences. It has warned that unless the government increases its spending on flood defences, the insurance industry may not continue their commitment to the 2003 principles.

That would be bad news for many homeowners.

Article Source: http://www.moneyarticlelibrary.com

Brokers Online are one of the leading uk websites providing quotes for Life Insurance and home insurance

Please Rate this Article

5 out of 54 out of 53 out of 52 out of 51 out of 5 

Not yet Rated

Click the XML Icon Above to Receive - Property and casualty Articles Via RSS!

Additional Articles From - Home | Insurance | - Property And Casualty

• What You Should Know About Renters Insurance - By : Heather Colman
  
• Why Should You Get A Homeowner Insurance? - By : Oliver Turner
  
• Protect Your Personal Property With Home Contents Insurance - By : Joseph Kenny
  
• Florida Homeowners Insurance – Soon Or Else It Will Be Too Late - By : Oliver Turner
  
• Contents Insurance – Check Your Cover - By : Michael Challiner
  
• Finding The Best Arizona Home Insurance - By : Oliver Turner
  
• What Is A Good Home Insurance Policy? - By : Brandon Miller
  
• What Should Your Homeowners Insurance Cover? - By : Brandon Miller
  
• Homeowner Insurance Policy – What Does It Look Like? - By : Gavin Bloom
  
• Instant Homeowner Insurance Quote – Shopping Online Is Easy - By : Gavin Bloom
  

Related Articles:

• 12- Copywriting Tips To Make Your Advertising More Powerful...
• Crime Prevention Through Environmental Design -CPTED-
• Empty Nest - an end of just the beginning?
• 3 Quick and Easy Steps to Time Management Mastery
• How to Increase Your Search Engine Rankings
• Mexico Vacation Planning: Anything You Want
• Dining Out With A Toddler
• Herbs For Breast Enhancement
• 10-Hot Tips... How You Can Dramatically Improve Your Sales With Professional Presentations...
• Vacation Rentals and Holiday Homes in Spain for Perfect Recreation