Flood Risk Insurance

The current agreement between the Government and the Association of British Insurers ("ABI") is due to end in July 2013.  At the moment there is an arrangement between the Government and the ABI that subject to some conditions flood insurance will be provided to home owners and small businesses which are located in areas of significant flood risk. 

At the moment the Government and the ABI have failed to reach agreement in their negotiations to extending the current arrangement beyond July 2013. 

If the current arrangement is not extended then this could have significant implications for the owners and tenants of properties located in areas of significant flood risk. They may find it very difficult or even impossible to obtain insurance cover for flood risk and where cover is available the insurance premiums and any excesses could be much higher than they are at present.

Given the current uncertainty as to whether the existing arrangement will be renewed property owners and occupiers of properties located in an area of significant flood risk should give thought to whether they are likely to experience difficulty in obtaining flood risk insurance. Anyone considering buying or renting a property that is located in an area of significant flood risk should carefully consider whether the will be able to obtain adequate flood risk insurance at a reasonable premium level. Anyone who is looking for insurance cover for a property in an area of significant flood risk may well have to take advice from specialist flood risk insurance brokers.

The risk of flooding is not just associated with rivers and coastal flooding.  A significant number of properties are at risk of surface water flooding. There are many recent instances which have shown that surface water flooding can be just as damaging as coastal and river flooding.

The issue of the risk of property damage due to flooding is likely to become of more importance as time goes by and home owners, occupiers and tenants should take into account the possibility that whilst insurance cover might be available now, it might not be available in the future.

Posted on: 05/06/2013

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.

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