Latest floods highlight increasing size of insurance risk

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28 November 2012

  • One in four UK homes now at risk from flooding*
  • More than 200,000 homeowners could be left without insurance from June 2013
  • The annual cost of damage from flooding in England and Wales could rise to £13.5bn annually

The severe weather battering Britain gives a stark demonstration of the increasing risk of flood damage to residential property in the UK.

With the moratorium on flood insurance due to end in June 2013, the current flooding crisis ratchets up the risk of insurance ‘ghettos’ in the future where homeowners cannot get cover. Unless the government and the Association of British Insurers find a workable solution for borrowers, more than 200,000 homes could be uninsurable by next summer.

The latest data from the Environment Agency reports more than 800 homes across the UK have already been flooded in the recent storms – and they are increasingly in areas with no history of severe flooding. But despite the fact a quarter of homes could be at risk from flooding, according to data from SearchFlow, many thousands of buyers still don’t order a more detailed flood search on top of their standard searches.

Richard Hinton, business development director of SearchFlow said: “Surface water flooding accounts for around half of all flood risks, but as the last few years have shown a freak deluge can happen anywhere. And now with soil so saturated from cumulative rainfall, groundwater flooding is a growing issue. Even a modest amount of rainfall can lead to flooding away from rivers, but many property owners don’t realise the extent of the danger they face. It’s no longer safe to assume that historically low flood risk is an indicator of what to expect in the future.

“Conveyancers are not climatologists and all they can do is provide borrowers with the maximum due diligence from the products at their disposal. Particularly in areas of the UK at significant risk of flood damage, it’s essential conveyancers make those purchasing property fully aware not just of the risks they face today, but of those that will develop in the coming years.

“Compared to the cost of a clean-up, higher insurance premiums, or even an inability to remortgage or sell property, a flood search is a very modest cost upfront when buying a home.”

In response to the increased risk of flooding, SearchFlow has launched a flood Alert Indicator Tool for convenyancers which highlights if a property is within 50m of a flood risk area.

*According to 2008 RMS 1000 year inland flood risk zones map.

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