Home Insurance and Flood Risk

Home Insurance and Flood Risk

Flood risk probably isn’t something you think about every day. But it happens. In fact, it is happening more and more frequently in the UK. For this reason, many people are taking out flood risk insurance to make sure their home is covered. 

flood risk insurance

Flood risk insurance isn’t normally the first thing that comes people’s minds. However, it is important if you live in an area that poses a high risk of flooding.

Living near large bodies of water (the sea, rivers, lakes and even streams) significantly heightens chances of flood and water damage.

Building and contents – Flood risk insurance for the entire home

When water levels rise, you run the risk of significant damage occurring e to both the building and the contents of your home. Insurance plans which cover all of these aspects allow homeowners to claim back money and repair, rebuild or replace anything that has been lost. Risk of flooding in the UK varies depending on where you live, so it is important to consider the risks before looking at premiums.

How is flood risk assessed? – Checking the area

Checking flood risk is easy. Look at the Environment Agency’s Flood Map for England and Wales. Those living in Scotland can take a look at the Scottish Environment Protection Agency. These flood maps display parts of land that have a risk of flooding from either the sea or surrounding rivers. Just because there is a risk of flood, doesn’t mean that every single home will be flooded: however, the chance still remains.

Rivers, lakes and the sea might seem obvious when it comes to flood risk assessment. Still, don’t forget other factors which could heighten the chances. Sewers, surface water, groundwater flooding and the presence of reservoirs can also pose a risk.

Flood risk and home insurance – Checking the property

Remember, the chances of flood risk in your area don’t necessarily mean that your home will experience the same: insurance providers will want to check the actual property. For example, if you live in an apartment which is several stories high your risk of flooding will be significantly lower. Insurers must also know about the property, any outbuildings it has and what else lies within its boundaries.

Flood risk insurance for home businesses

Many UK are run from the operators’ homes. Many even assume that house insurance plans cover home businesses: however, this usually isn’t the case. In most cases, domestic policies will not cover it. You will need to take a close look at the terms and conditions – which should always be the case when taking out a policy, without exception!

Things to keep in mind for homes in flood risk areas

According to ABI (Association of British Insurers), there are three different insurance provision categories. They are based on an annual statistical risk of flood in different area.

The categories are:

  • Low: Yearly chance of flooding is one in 200 (or 0.5%).
  • Moderate: Annual chance of flooding each year is one in 75 (1.3%) or less but greater than one in 200 (0.5%).
  • Significant: The chance of flooding in any year is greater than 1.3% (one in 75)

Flood risk to your home: What about contents and building insurance?

Contents and building insurance (unless taken out as comprehensive policy) are usually two separate insurance policies. Concerning flood risk, damage to the building is usually what is taken into account. However, a separate contents insurance policy will usually cover water damage in general. Remember, though: terms and conditions always apply. So make sure to check them closely before putting pen to paper.