As the water rises, it's time to check your cover

Floods can wreck your home, car and finances but there are ways to protect yourself, says Chiara Cavaglieri
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The Independent Online

The Cumbrian town of Cockermouth has been the biggest victim of floods so far this autumn with its high street turning into a raging river after torrential rain hit last week.

Cumbria experienced the equivalent of a month's rainfall in just 24 hours leaving cars and trees floating through the streets and at least one fatality. With 92 flood warnings currently in force across England and Wales, experts warn it's time to take action to prevent your home being damaged.

"If you are currently living in an area at risk of flooding, taking preventative measures as soon as possible is crucial, especially if you know your property has been flooded before," says Julie Owens, the head of home insurance at

Now is the time to check that your home insurance policy provides adequate cover for flood damage. Flood claims typically cost £28,000, compared with only £7,300 for fire claims, according to the Environment Agency. The clean up costs after the last big floods in the UK – in summer 2007 – totalled £3bn, according to the Association of British Insurers (ABI). The ABI says that with around two million homes now at risk from flooding the repair cost this year could easily top that. Despite this, a YouGov survey revealed last month that only 6 per cent of households are prepared for flooding, while 80 per cent have taken steps to protect against fire.

If you already have a home insurance policy, check the details of the cover carefully, paying particular attention to the excess levels and limits. If you have never claimed for flooding before, there should be plenty of competitive premiums on offer from various providers so it is important to shop around carefully.

Check your car insurance policy too, because flood damage would be covered only if you buy a fully comprehensive policy, not third party. The cost of flood-damaged vehicles can be significant with water being sucked into car engines and corrosion causing mechanical parts to fail months after the original damage.

"Repairs to flood-damaged cars can be expensive with many vehicles being written off for health and safety reasons. In fact, the value of claims for flood-damaged cars is four times more than the average claim, according to our in-house statistics," says Niki Bolton from Esure home insurance.

If you have previously made a claim for flood damage, you could be paying considerably more than you used to. Premiums are reviewed on a case-by-case basis but you can expect much bigger premiums and increased excess levels after a claim. And switching policies might not be an option as many insurers could refuse to offer you cover.

The good news is that after a pact between the Government and insurers, flood-risk homes cannot have cover taken away as long as the state continues to invest in flood defences. Serious problems can arise, however, when selling a high-risk property. Insurers are free to charge new buyers exorbitant premiums and excesses which could make the property virtually impossible to sell.

The remedy may lie in specialist brokers which use smaller underwriters and may be more willing to look at individual cases. Companies such as Bureau Insure, a specialist household flood insurer, may offer full cover for homes considered too risky by mainstream insurers. Brokers specialising in cover for flood-prone properties can be found through the British Insurance Brokers' Association (Biba).

Some insurers also offer improved premiums if you take steps to prevent flood damage. Helpfully, the Environment Agency has introduced a texting service so that those at risk receive early notice of an impending flood. What can you do to reduce the risk of flood damage? Clear drains and gutters of debris to allow rainfall to drain away more effectively. Move valuable and electrical items upstairs and fit airbrick covers.

"Monitoring and seeking further advice from the Environment Agency or National Flood Forum is also recommended; the latter also has a 'blue page directory' which showcases flood prevention items and approved fitters," says Ms Owens.

Unfortunately, despite a Government pledge to increase flood-defence spending from £200m to £800m by 2011 and homeowners forking out for expensive alterations, not all insurers will offer lower premiums or excesses. Increased storm damage and flooding have been clearly reflected in the rising cost of home buildings insurance. The latest Insurance Premium Index from the AA shows that the average buildings insurance policy now stands at £227, an increase of 1.6 per cent between July and September and its highest level since the index began in 1994.

More extensive alterations for those at high risk such as swapping carpets for ceramic tiles and fitting one-way valves to drains and pipes to prevent surges may be the best option. Insurers insist that planned improvements in permanent defences will make a difference.

"I would say that the more the property owner did to protect their property or reduce damage in the event of a flood, the more likely it is that their home would be insurable and sellable," says James Hillon from Co-operative Insurance.

Yet even with homeowners and the Environment Agency doing their bit, the future for settling flooding claims remains uncertain. The insurance industry's agreement with the Government is in place only until July 2013 and relies on the state's spending pledge which will have been affected by the recession.

One ray of hope, however, is that some insurers are looking at ways to amend flood cover without premiums having to rise too sharply. Earlier this year, Biba urged the Government to address the issue of resilient repairs. As things stand, insurers repair damaged properties by returning them to their condition prior to flooding, with no opportunity to improve the property and prevent damage from future flooding. In response, the Co-operative Insurance has stated it is considering implementing the use of resilient repairs such as concrete flooring and high electrical sockets into its claims settlement provisions. The Co-operative has suggested that this cost be shared between the insurance company, the local Environment Agency and the customer.

"The long-term benefit would be seen by the customer who will not face prolonged periods out of their home as a consequence of flooding incidents and the insurer who would be in a position to provide future cover at more affordable premiums," says Mr Hillon.

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