According to government figures 2.4m homes are at risk of flooding from rivers or the sea, with 370,000 considered as being at significant risk. Three million more risk flash flooding where downpours overwhelm drainage systems*. In this bulletin, we look at the latest on Flood Re and how Plum can help you to cater for clients whose homes have previously been flooded or are at risk from flooding.
Update on Flood Re key issues are still to be resolved
The Water Act 2014, part of which sets up Flood Re which will come into operation in mid-2015 to replace the Statement of Principles, received Royal Assent on 14th May. Flood Re will be paid for by an annual levy on all home insurance policies that will create a fund which will help to ensure that all homeowners will still have access to affordable flood insurance.
However, Flood Re won't cover properties built since January 2009, properties in Band for Council Tax, small businesses (micro-businesses such as bed and breakfast establishments will now be covered if they hold a policy classified as being domestic), charities and a significant proportion (some commentators suggest as much as three million) of the UK's estimated four million leasehold private properties. So debate on the detail seems set to continue and there’s even talk now of the creation of Flood Re to address the SME and leasehold issues. We’ll keep you informed of further developments.
Flood risks - how we can help
If you have clients with non standard flood insurance needs, our commitment to individually underwriting every risk means that where there's been past claims for flooding or there’s an ongoing exposure, we’re more likely to provide you with a quote. We've set out below information on the types of cases where we can help, how we’ll look to underwrite flood risks and the information we’ll need.
Where we’re looking to say yes.
We’ll look to provide quotes on all Environment Agency (EA)/Scottish Environmental Protection Agency (SEPA) flood classifications, but specifically:
Properties that have experienced previous flooding; where the client has taken professional advice to protect their property, and has installed specific flood protection. It’s important to stress that electric pumps and flood warning services are not accepted as satisfactory flood protection on their own, particularly where there has been a substantial flood claim.
Where the EA/SEPA has implemented a flood alleviation scheme to protect a number of properties from flooding that has occurred previously.
Clients with properties in areas classified as being a low or medium risk are likely to be offered a quote where there has been no previous flooding to the property or surrounding area with an increased flood excess and flood loading.
Terms will apply relative to the risk. So a high sum insured will attract a higher minimum excess etc.
Single story properties will warrant additional terms due to the likelihood of the whole property being exposed.
Terms on previously flooded properties will depend on the cause of the flooding, size and date of the loss and remedial measures taken since.
What information we’ll want
We always want to understand each risk we see so we can give you the best possible terms, so we may want any (or all) of the following:
A fully completed flood questionnaire.
Full details of previous flood incidents will always be required including dates, amounts and circumstances.
Risk address identification relative to EA/SEPA flood maps is very important, so we may ask you to get the client to identify their property on a map so we can be entirely clear as to the flood risk.
Where we’ll say no
We always try to say yes where others say no but unfortunately we can’t help in the following circumstances:
Properties that have experienced previous flooding; where the client has not taken steps to protect their property for the future, especially in high risk EA/SEPA areas.
Where there has been no protection put in place, we won’t offer quotes excluding flood cover in high risk EA/SEPA areas.
Risks that are in an area with a current flood warning.
Top quality service and support
You can choose Flex, Amethyst or HomeWorks for your clients secure in the knowledge that in addition to a great product, if there are any questions or issues that arise, you can pick up the phone and speak to a person with the authority to provide the answers you need.
To request a quote, access product information or to view and download documentation, visit our on-line broker centre.
Or contact our underwriting team:
Flex & Amethyst: 0845 481 0069
HomeWorks: 0845 263 7468
We look forward to hearing from you soon.
*To be at risk of flooding is defined by the Environment Agency as meaning that an area has a 1-in-100 to 1-in-1000 chance of flooding in any given year. There are around 2.4 million homes in the UK at risk of flooding from rivers and the sea. 370,000 of these are considered to be at a significant risk, meaning they stand a higher chance of flooding 1 in 75 or greater.
Flash flooding sometimes referred to as groundwater or surface water flooding occurs in many towns and cities, where torrential downpours falling on hard tarmac overwhelms drainage systems. According to the Environment Agency there are an additional three million homes at risk from flash flooding.