Up the creek but with a paddle: cover turns the tide

As the storms show how vital it is to be fully insured, Esther Shaw looks at the predicament of people in flood-risk areas
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The Independent Online

Homeowners hit by the flash floods and gale-force winds that have been wreaking havoc in the UK will now be picking up the pieces.

Homeowners hit by the flash floods and gale-force winds that have been wreaking havoc in the UK will now be picking up the pieces.

While the full cost of the damage in Carlisle, Northern Ireland and Scotland is not yet known, the storms are expected to lead to a bill for insurers of "tens of millions of pounds", according to the Association of British Insurers (ABI).

The devastation in and around Carlisle is so bad that flood claims are being reported from areas that have never made them before, according to the rural insurer NFU Mutual.

In the wake of the storms, the environment minister Elliot Morley announced a review of the UK's flood-warning system was underway. He said previous plans for a £20m flood prevention scheme for Carlisle were being finalised.

But this will offer little solace to the thousands of families forced to flee their homes who now face months of mopping-up and repair work. Those hit by the storms will be making emergency temporary repairs, which should be paid for by insurers - but they should make sure they keep all the receipts.

"Many policies offer 24-hour emergency helplines," says Leonie Edwards, spokeswoman for the ABI. "Call your insurer as soon as possible for advice on how to progress your claim."

The company will arrange for a loss adjuster and other specialists to visit your home to assess the damage and decide on the best course of action, says Maria Donald at insurer Zurich. They will get emergency pumping and repair work under way as soon as possible, and confirm the level of cover you have to meet the cost of alternative accommodation. As back-up, she recommends writing a report to assist with your claim, and supporting this with photographs.

If your car has been flooded, a fully comprehensive policy will pay out for repairs or replacement. But third-party fire and theft policies don't give any cover in this situation.

Last week's floods brought scenes reminiscent of those in Cornwall last August when flash floods caused devastation in the village of Boscastle - a chilling reminder of our vulnerability to extreme weather.

Given that the cost of a flood claim can rise to £30,000, making sure you are covered has never been more important.

A crucial first step is simply to check you have enough building and home contents cover to repair structural damage and replace goods in the event of your property being flooded; many people underestimate the true value of their possessions. This is worth doing even if you don't live in a high flood-risk area.

Unfortunately, many people will find that the cost of cover has soared because of their proximity to flood-risk areas and because the rise in claims is forcing up premiums generally.

Worse, if your house is in one of the most vulnerable areas, you may find it hard to get a policy at all. In 2000, insurers threatened to withdraw cover from thousands of homes unless the Government pledged to invest in the UK's flood defences. A two-year agreement was then signed, but when this ran out in 2002, the ABI warned that insurers would no longer be obliged to provide cover to all homes. Instead, it drew up a "statement of principles" under which firms are required to insure only properties judged to be at risk of no more than one flood in 75 years, or those in areas where improved defences are planned to be in place by 2007. Some homes in the highest-risk areas could still be denied cover.

Ms Edwards at the ABI says insurers are working with households in this position on a case-by-case basis, and suggests people could improve their chances of getting cover by installing their own defences.

"If you want to buy a property in a flood-risk area, you should speak to the council about what defences are planned," she says. "Then approach the existing insurer to see if they will offer you the same cover provided to the previous occupier."

Some insurers are now using technology to calculate flood risk more accurately. Norwich Union launched a new digital map last year, pinpointing the risk of river flooding to individual homes. The Environment Agency has since published its own updated online flood maps, enabling members of the public to find out if the place where they live has a low, moderate or significant risk of flooding.

Contact: the Environment Agency floodline, 0845 988 1188 or www.environment-agency.gov.uk

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