In England and Wales, approximately 5.2 million properties are at risk of one or more sources of flooding, equating to 1 in 6 homes.
The 2015/16 winter storms were the result of the wettest and warmest December since records began. The worst of the flooding was across Yorkshire, Lancashire and Greater Manchester.
The Association of British Insurers (ABI) estimates that flood damage from these storms has resulted in claims for more than 15,000 homes and business.
The average cost of damage to a flooded property is between £20,000 and £30,000, however the 2015 winter storms were atypical, with the average cost of each domestic claim reaching around £50,000. This reflects the extensive damage caused to properties, not only by the inundation of water but also the damaged caused to the structure of a property as well as contamination from flood waters.
Properties which have flooded or are in high risk areas can face higher insurance costs as it is more likely the insurer will need to pay out to deal with a flood. However, with the introduction of Flood Re, which launched at the beginning of April 2016, insurance companies registered with the scheme can provide insurance and maintain affordable pricing on their policies. Insurance companies will pass the flood risk of around 350,000 eligible home insurance policies to Flood Re.
Insurers will be charged a premium for each policy, based on the property’s council tax band, with prices varying from £210 for tax band A to £1,200 for tax band H. Flood Re won’t alter the way home insurance is currently purchased and should provide homeowners with peace of mind that, even after a flood claim, insurance with affordable premiums and excesses should be available. Houses built since 2009 are excluded from the scheme.
Aside from the physical damage to a property, if a property is at risk of flooding it may be difficult to:
- Obtain suitable insurance cover
- Obtain a mortgage
- Sell the property in the future.
Flood risk should be at the forefront of every property transaction and X-Press Legal can assist house purchasers, solicitors and others involved in the transaction find out potential flood risk. The Law Society states that “in all conveyancing transactions, ....... a solicitor should mention the issue of flooding to the client and, where appropriate, make further investigations.
X-Press Legal Services offers a range of flood reports which identify whether a property is at risk of flooding from sources including rivers, coastal, surface water and groundwater. They can provide a property specific insurance rating on the likely availability of standard-priced insurance and include a statement on the potential for the property being ceded into the new Flood Re scheme.
DISCLAIMER: This article should not be regarded as constituting legal advice in relation to particular circumstances. This article is merely a general comment on the relevant topic.
Published on 17th August 2016
(Last updated 23rd March 2018)