As I sit here and write this and sip a cup of lovely, hot tea, it is raining outside, and raining quite heavily. I read where today in some parts of the country they will receive a half month’s worth of rain in just the one day. Why they stated it as a half month’s worth of rain is beyond me. They could have said parts of the country will receive 15 days worth of rain in one day, but they decided half a month’s worth of rain sounded better. Maybe it sounds more dramatic.
Last year was one of the wettest years on record and from all that rain came flooding. And it was a lot of flooding. I was on a train going south last year and from the tracks and train saw many a flooded field. The extent of it had to be seen in person and not just from the news.
Oddly enough a few years back we were experiencing drought conditions, which again is odd for an island; you’d think we would have plenty of water.
I have read where they do not expect any drought conditions this year. Profound statement that one is.
But back to the rain and the flooding issues that come from it. What can you do to protect yourself from flooding and the damage it can do?
Well first thing is not live in an area prone to flooding or that may be in a flood plain. In many instances if you were to purchase a property and it is in a flood plain or area prone to flooding, and you obtain a mortgage to buy the property, the mortgage company or bank may require you have flood insurance as a part of the property or building insurance you need for the property.
But wait, many of you may be thinking, isn’t flood insurance already included or a part of my house insurance? And the answer is, no it is not.
As with all insurance policies you need to read the coverage and know what is covered should you need to make a claim.
The rain outside here has really picked up since I began writing this; maybe Mother Nature knows I am writing this and isn’t happy; or maybe she is happy the masses will be informed and the rain is her way of showing joy.
But I digress….
The fact is that flood insurance is not something automatically added to or covered in all homeowners/building or property insurance policies. It is something that in most instances has to be purchased separately, or added to the insurance policy. That is why many people who experienced losses last year due to floods were out of pocket and and the government to help or bail them out. (no pun intended)
These were people who lived in areas that had not experienced flood issues in the past and seemingly out of the blue the area they live in gets flooded. They look to place a claim for their losses to their insurance company only to have the insurers refuse the claims due to not having flood insurance.
A sad story that occurred in America was Hurricane Katrina. This hurricane hit the gulf coast of America and basically changed the topography of the area forever due to the rush of water breaking the levees and flooding New Orleans and the surrounding area. Those with insurance put in claims stating the hurricane had caused the damage and wanted compensation. The insurers stated no, it wasn’t the hurricane that caused the damage, it was flooding; rising flood waters were the actual cause of the losses. So they refused the claims as many people did not have flood insurance.
Now this little tale wound up in the courts for the lawyers and judges to decide. But in the meantime those without homes are without homes.
So let’s suppose you find out your property is in a high flood risk zone, or flood plain, what to do??
Well look into getting a flood insurance policy, which sounds easy enough, but may not be just as simple as picking up the phone and getting coverage. Many insurance companies are not offering this type of coverage, and some of those that will offer the coverage do so at a steep price or premium. In some instances flood insurance can cost an extra £500-£700 a year, in addition to your current policy. Some insurers add an extra 20% to the existing policy if there have been no previous claims for that property due to flooding, or it can be as high as an additional 100% of the premium, if there has been recent flooding and claims in the area.
The insurer will want to look at what flood defences are already in place, has the property ever experienced any flood damage in the past and if there is a basement or cellar in the property and if anything is stored there.
This is in part why many property owners and MP’s in some areas are asking the government to look more into this and make sure flood insurance is in place and can be purchased by those that may need it.
In 2008 the government agreed to a Statement of Principles with the insurance industry. This was to ensure (no pun again) that flood insurance would be “as widely available as possible without distorting the market”. This basically is saying insurers need to offer flood coverage as standard in most instances. This still does not guarantee coverage for properties at a significant threat of flooding, nor does it address premiums or the additional cost.
So something to look into and consider when purchasing a property, flood insurance, do you need it.