What to do if your home is at risk from flooding
Insurance
Advice to householders who could be refused insurance how to keep their heads above water.
TENS of thousands of homes in areas with a high risk of flooding could be blacklisted by insurers after a two-year agreement between the industry and government expired last week. Homeowners who cannot get insurance may be forced to repay their mortgages and bear the costs of flood repairs themselves.
Insurers had pledged to cover 2m homes and businesses on flood plains until the end of 2002. Now, however, insurers will automatically cover only properties in areas deemed to have adequate flood defences.
The Association of British Insurers (ABI) estimates about 500,000 homes are not adequately defended. Of those, about 200,000 have a strong risk of flooding and may be blacklisted. But the ABI insists only a small proportion will be refused cover.
We answer your questions on getting cover in high-risk zones.
How do I find out if my home is at risk from flooding?
You can enter your postcode into a search on the Environment Agency's website at www.environment-agency.gov.uk. Alternatively, call its Floodline on 0845 988 1188.
But your home is not necessarily at high risk just because it stands in a flood plain. It also depends on the flood defences in place. Details should be available from your local authority and the Environment Agency.
What will happen if my home is one of the 200,000 at high risk?
Your insurer will contact you when your policy comes up for renewal. In the worst-case scenario, you could be uninsurable. Alternatively, your excess could rise to as much as £5,000, compared with a typical level of between £50 and £100.
Will my premiums rise?
If you live in a high-risk area, your premiums are probably already much higher than normal. Cover can be as much as 300% more expensive than for properties that are not at risk.
The end of the insurance agreement should not make a big difference to the premiums you are paying at the moment, aside from the normal increases at your renewal date.
What can I do if my home is blacklisted?
Insurance companies say they are willing to advise any uninsurable homeowners on ways to change their property to get cover. You could fit special valves to your plumbing system, for example, to help prevent sewage flowing into your house during a flood. Such steps could also reduce premiums.
If I cannot get insurance, what will happen to my mortgage?
All lenders insist on full building insurance before making a mortgage offer. If your home is blacklisted after you have taken out a loan, you may be covered by the lender's own insurance.
But David Hollingworth of London & Country, a mortgage adviser, warns: "If your lender finds out you are not insured, it could ask you to repay the remaining balance of the mortgage. Many lenders, however, may help you get your property up to an insurable standard."
If my premium is high, is it worth shopping around for more competitive cover?
Most insurers rely on the same information supplied by the Environment Agency, so there may not be much difference between premiums.
However, Norwich Union will soon start to use information from its own flood map of Britain, which it claims is more accurate than that of the Environment Agency. David Ross of Norwich Union says: "We expect more homes to be removed from the at-risk category than added, so premiums are likely to come down."
Some insurers have promised to continue providing cover to existing customers, even if their homes are deemed to be at high risk under the new system. They include Halifax and Churchill Insurance.
Halifax is also providing cover to new buyers in cases where the previous owner had both the mortgage and buildings and contents cover with Halifax, Bank of Scotland or Intelligent Finance.