As the waters have subsided and the floods of politicians have made their wellington-booted way back to Westminster, the task of clearing up the mess begins.
But for millions of Britons, there won’t just be the distress of ruined possessions. There are an awful lot of financial questions for the future – not least of which is whether they will ever qualify for affordable home insurance again. Will it affect their car insurance? Even worse, have recent events made it impossible to sell their property?
We’ve been investigating.
Will flooded properties qualify for home insurance?
If you can’t get home insurance then you’re really stuck. It doesn’t just affect your ability to protect your property and possessions; many mortgage lenders demand that a property is protected as a condition of the loan. So if you can’t get insurance then you may be unable to remortgage too.
However, the good news is that insurers are obliged to continue offering cover to existing customers; they can’t just cast them adrift. However, they can raise premiums and some homeowners are worried they will be unaffordable.
Jason McClean of the website www.thepropertyinsurer.co.uk says that there are approximately 5.2 million properties in flood areas and warns that previous damage is likely to affect future premiums: “If your property floods and you make a claim, then you will need to declare this in the future. This will be taken into consideration when insurers price your annual policies.”
However, he is optimistic that the majority will be able to source home insurance, especially if they take steps to flood-proof their homes. “There is an increasingly competitive market for specialist flood insurance. People who have flooded in the past or live in the flood area postcodes designated by the Environment Agency, will need to seek out these expert providers. Prices will then be realistic against the risk.
What if insurers won’t help?
Most insurance companies understand that affected people are distressed and financially stretched after flooding on this scale, and want to resolve claims as quickly as possible.
However, the Financial Ombudsman Service has said that there can be a rise in complaints after flooding events, commonly over the time taken to carry out repairs, rejected claims and whether damage is caused by flooding or is simply wear and tear.
It advises that customers call their insurer as quickly as possible and keep a record of all communications. Keep records of any extra spending such as hotel bills, and take photographs of the damage (including marking the wall where the water reached). It’s also worth keeping samples of things like carpets to prove the quality.
If you are unhappy with how a claim is being processed then first take it up with your insurer, making it clear how you expect it to be resolved. If you think your insurer hasn’t resolved it satisfactorily then contact the Ombudsman – details of how to complain can be found on its website.
How much will home insurance premiums rise?
McClean says that finding the right insurer can be key to keeping the cost down: “If you have new flood defences installed and are unlikely to flood again, a good expert insurer will understand that and rate the risk accordingly. If you flood regularly every year then your premiums will be naturally higher.”
Homeowners may be reassured to hear that the government and insurance industry are currently developing a not-for-profit scheme to be known as Flood Re. This would provide a fund to insure homeowners whose homes are at a very high risk of flooding, with the premium to cover flood risk capped at an affordable amount.
It’s hoped that this scheme will be ready to launch by summer next year. You can get more information on Flood Re via the Association of British Insurers’ website.
Will car insurance premiums rise?
Of course it’s not just houses and possessions that may have been harmed by the floods. Cars have been damaged too, by rising water and also by the increased risk of accidents when the roads are so wet.
We contacted a number of insurers and comparisons sites, but they all declined to speculate on what premiums might do next. However, it seems highly likely that premiums will rise, even for drivers whose vehicles have been unaffected by flooding in their area. After all, insurers consider nearby claims when setting premiums.
Some motorists will no doubt be horrified to discover that not all car insurance policies actually cover flood damage. Gocompare.com estimates that as many as 17% of car insurance policies exclude water damage.
Motorists living in flood-risk areas may want to check their policies for exclusions and upgrade their cover. It’s also worth having an action plan to move your vehicle to higher ground when flooding starts to look likely – although not if that puts you at risk.
Another point worth mentioning is that if you’re planning to buy a second-hand car over the next few weeks, be very careful. Some driving agencies have warned that sellers may be offloading cars rather than claiming on their insurance. Cars which have been immersed in water can seem fine initially but may have developed potentially fatal faults.
The AA published an excellent list of tips for spotting flood-damaged cars a few years ago, and it’s still a relevant checklist.
Are affected homes simply unsaleable?
Many homeowners will be worried that their homes are now simply unsellable, and they’re right to be concerned. Robin Gould, of buying agency Prime Purchase, says: “Undoubtedly the issue of flooding will have an impact on prices and the ability to sell, particularly in the current market which outside London is still not up to pre-2008 levels. In a stronger market, people are more willing to make allowances and are more confident about negotiating.”
However, it’s not all bad as riverside homes can be a selling point. Edward Heaton, of the agency Heaton and Partners, explains: “The value of houses that flood can be diminished by as much as 20%, although sometimes there is a balancing act with really prime properties with river frontage, as this is of course very sought after and can equally attract significant premiums.”
Gould suggests would-be buyers can arrange a discount that allows them a budget to flood-proof the property. However, both experts agree that many homeowners are now going to find themselves trapped or selling at a painful discount.
What do you think? Should flooded homeowners expect more state support? Should the rest of the UK pick up the bill? Have your say in the comments below.