Renewed flooding brings insurance dispute to a head

December 8, 2012

Landlords Insurance

It will hardly have escaped landlords’ attention that as autumn transitions into winter, yet again the UK has been struck by severe flooding in several different regions.

These disasters are bringing to the head a long outstanding sore point between property owners, insurance providers and the government*.

The issues are complicated but can perhaps best be summarised as follows:

  1. few experts doubt that flooding and flooding risk is on the increase.  There may be some dispute just how much that is attributable to natural versus man-made climate change but happening it is;
  2. for some time, significant numbers of people in the insurance and environmental industries have also highlighted the increased risk arising from government and private enterprise determination to build increasing number of properties in what are recognisably flood plains that are highly susceptible to flooding;
  3. to make matters worse, some people also suggest that decade’s worth of neglect of flood defences have significantly exacerbated the risk of flooding in many areas.  Most agree this is not a party political point, as this failure to attend to such matters has been a recurrent theme through various shades of national and local political government;
  4. as a result of all of these issues and the huge increase in risk, some insurance providers were and remain, uneasy about providing appropriate cover.  That might apply to any property requiring buildings and contents insurance or unoccupied property insurance, that might be located in an area known as constituting high flood risk;
  5. the potential problems associated with being unable to secure such insurance are huge.  As the news item indicates, it might make it difficult to subsequently sell a property or to have the peace of mind of knowing that you are covered against what could be a calamity;
  6. from the point of view of politicians, as the Prime Minister is quoted as saying in this article, insurance providers must step up to the mark and meet their obligations to provide appropriate cover.  From the point of view of some insurance providers, they are being asked to take on a significant additional financial risk as a result of government and building companies’ inaction;
  7. the Prime Minister’s personal involvement in the discussions now underway between insurance providers and the government indicates just how serious an issue this is.

It might be highly advisable to look carefully at your policy to see what cover you have available against flood related risks.

It is perhaps equally advisable to make sure that you understand these risks in any area you are considering buying into.

*Source:

http://www.bbc.co.uk/news/uk-20506344

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