Tuesday, 22 February 2011

Flood stories flow in

We are being kept very busy with a selection of stories supplied by Neil Cook of Allstyles Insurance (T R Youngs Insurance Brokers). Neil has been involved with assisting clients in areas that a liable to flooding in the UK.

Flash flood warning for southern England -The Met Office has issued a severe weather warning across a swathe of southern England running diagonally from Land’s End to Wash

Coastal towns such as Lyme Regis are expected to be battered by strong winds (Getty) Britain is braced for flash flooding as heavy storms are forecast for Sunday night.

The Met Office has issued a severe weather warning across a swathe of southern England running diagonally from Land’s End to Wash.

Coastal regions popular with holiday makers are expected to be battered by strong winds, while up to three inches of rain is expected to fall.

A Met Office spokesman said: “There is a high risk of severe weather affecting parts of southern and eastern England during Sunday night and Monday morning.

“Heavy rainfall overnight may give 20-30mm of rain quite widely and 50-80mm locally. This rain will be accompanied by strong, possibly gale force winds.

“The heavy rain could lead to flooding in some areas and cause disruption to outdoor events and transport networks.”

The south west and central southern England will bear the brunt of the weather, with heavy winds are expected to peak at 45mph near Southampton.

Back to July 2007 - If a deal between the Government and insurers fails, policy costs will jump

Back in April, the Met Office was predicting a long, hot summer. Instead, we’ve been deluged by rain with tens of thousands of people affected by flooding in the North of England, the Midlands, the South West and the Thames Valley.

In the aftermath, many homeowners have been left facing a financial catastrophe. Abbey estimates that as many as 5,000 of those affected by the floods have no home contents insurance. “For some people, home insurance is considered an optional extra,” says Prasad Shastri, head of insurance marketing at Abbey. “The recent flooding demonstrates how important it is to take out a policy that will comprehensively cover you.”

Because the level of claims is so high – the Association of British Insurers (ABI) says the total cost is about £1.5 billion, while Norwich Union alone has around £150 million of claims – it is likely that insurance premiums will rise across the board. David Ross, of Norwich Union, says that it is “inevitable” that premiums will creep up, although he expects the increases to be relatively modest. Moreover, they are unlikely to happen immediately. In fact, if your insurance company tells youthat your premiums are rising now because of flooding claims, they are talking “absolute balderdash”, says Richard Mason, director of the price comparison website, Insuresupermarket.

“Claims have not yet been settled. They take a while to filter through the system. We probably have six to twelve months before we really start to see the knock-on effect,” he says.

While most price increases should be relatively modest, Mr Mason says there is a danger that premiums could rise dramatically in affected areas. “At the moment, ABI members have a gentlemen’s agreement with the Government, by which insurers agree not to pull out of flood risk areas, or to raise prices significantly, so long as the Government contributes £200 million a year to flood defences,” he says. “However, if the Government reneges on the agreement, we could see prices in some areas go up tenfold.”

The average cost of settling a claim for a flooded house is £30,000. As insurers estimate that houses in risk areas will flood once every ten years, the contents’ premiums for those houses should be, in theory, £3,000 a year in order to cover the risk. In fact, they are about a tenth of that. You should, however, keep an eye on your home contents’ premium, even if you do not live in a flood risk area.

Recent research by Defaqto, the financial product research business, shows that price comparison websites, such as Insuresupermarket, have increased competition for new customers, while existing customers can often be penalised.

“It appears that loyalty never goes unpunished,” says Brian Brown at Defaqto. “Rewards are only available for the disloyal.” According to Confused. com, another price comparison site, homeowners can save 45 per cent on their contents cover by shopping around – equivalent to £151 a year.

But there are other ways of cutting the cost of cover. Installing burglar alarms or superior locks, raising the excess on your policies and paying annually, rather than by direct debit all help to reduce premiums.

Make sure too that you are not underinsured; if you are, your insurance company may only pay out a part of your claim – or may even not pay out at all.

And remember that your home contents are probably worth more than you think. A survey this month from Endsleigh shows that even students need to think carefully about their level of cover. The average student takes more than £4,000 of possessions to university, says the study. But despite the relative value of their possessions, one in three felt that paying for insurance was an unnecessary expense.

How to cut the cost of cover

Compare deals at comparison websites, such as moneysupermarket.com and uSwitch.com.

Check the whole market. Certain insurers, notably brands owned by Royal Bank of Scotland, including Direct Line, are not listed on comparison sites.

Establish whether any comparison sites you use give estimated prices, or actual quotes. Quotes are guaranteed at GoCompare.com and Confused.com.

Contact the insurers who give the best quotes to ask whether you are eligible for any offers or discounts. Haggling on price is quite acceptable.

Cut your risk. Make sure that approved locks are fitted on your doors and windows and consider installing a NACASS-standard burglar alarm. Joining your local Neighbourhood Watch scheme – and informing your insurer – can also help.

Avoid claiming, where possible. Cashing in on a small mishap will hit your no-claims discount.

CASE STUDY: “We are surprised at the size of our claim”

It has been a devastating time for Barbara Maxfield, 68, and her husband Terrence, 70, from Toll Bar, in Doncaster.

“We live in a bungalow at the lowest end of our lane, so the flood water went right through our house,” Mrs Maxfield says.

“We were given only half an hour’s notice that our home was at risk, “ she says. “We did as much as possible – stacking things up to try to put them out of the way – but we never dreamt how high the flood water would rise. We have lost everything. All our belongings are in black bags in a skip outside the house.”

The Maxfields, left, who have lived in their home for 40 years, have been told that it could be up to a year before they will be able move back in. “We are looking for a caravan, at the moment, because we would prefer to be on the property to keep an eye on it, but there is none available. It would seem that a lot of people have had the same idea.”

The Maxfields’ possessions were fully covered by their home contents policy from a major insurance company which has, at least, provided some consolation.

“We did have full insurance, I took out as much as possible,” Mrs Maxfield says, although she says even they are surprised by the size of their claim. “Until everything is gone, you just don’t realise how much of value you have in your home.”

Insurers axe flood cover on homes

In a rebellion against spending cuts, insurers are refusing to renew policies if improvements have not been made to flood defences.

The Environment Agency estimates that 500,000 homes are at high risk of flooding

Insurers are refusing to renew buildings insurance for some flood victims because of a lack of spending on defences.

It comes as the government considers asking local communities and businesses to pay for millions of pounds of flood defences.

Maria Harrogate, 54, from Keswick, in Cumbria, made a flood claim in 2005 and again in 2009.

When her policy was due for renewal in 2010, Canopius, her insurer, removed flood cover saying there was no evidence of improvements in flood defences. It is the first sign that insurers are starting to rebel against spending cuts.

The Environment Agency estimates that 500,000 homes are at high risk of flooding.

This would normally make them difficult to insure but, under a “statement of principles” agreed by the industry and the government, insurers are committed to renew buildings insurance cover for existing customers, and extend it to buyers of their properties, provided there is adequate flood defence spending in place. The agreement ends in June 2013.

Earlier this month the government announced cuts to flood defence spending that would average 8% over the next four years. Spending on new defences will fall by £95m in the next tax year — a 27% reduction. Many projects have already been shelved, including schemes in Leeds, York, Thirsk, in North Yorkshire, and Morpeth, in Cumbria.

If you want to contact Neil Cook about Flood Insurance follow this link. http://www.jml-insurance.co.uk/contactTRYoungs.php

Also if you have personal exp[eriences about difficulties getting insurance for flood affected property in the UK

There are over 40 articles, blogs and press releases on Flooding Problems in the UK listed at http://www.jml-insurance.co.uk/index.php?id=434

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