Households in flood-stricken areas of Cumbria could see their already expensive insurance bills increase again following Storm Desmond.
Residents who pay up to £2,000 for cover face further steep increases in premiums after some areas were hit for the third time in ten years.
Under an agreement between the government and insurers, households in high-risk areas must be offered policies that include cover for flood damage from their existing provider. However, there is no cap on costs, and experts said that residents could expect to pay more now that flood defences have proven inadequate.
“There were serious floods in the affected areas as recently as 2009 and 2005 and insurers will already be charging up to four times as much for a home and contents policy,” said Kevin Pratt, insurance expert at Moneysupermaket.com. “This means people with a modest home could already be paying well into four figures for their insurance and if they have to renew in the new year, premiums are likely to rise again.”
Aviva, the UK’s biggest insurer, confirmed that some residents faced higher bills. A spokeswoman said: “Premiums are set relative to the risk that each property represents and we use our market-leading flood data to help assess risk at an individual property level.” Malcolm Tarling, of the Association of British Insurers, added: “Flood premiums will continue to reflect the actual flood risk and claims.”
There is hope for homeowners in the form of an industry initiative starting in April called Flood Re. It will allow insurers to pool the risk of providing cover in flood prone areas.
If an insurer decides to participate, the portion of a homeowner’s insurance policy that covers against flood damage would be capped according to their council tax band , ranging from £210 for a Band A home to £1,200 for a Band H. Experts said this could help drive down costs for the 350,000 highest-risk homes. However, the scheme will not apply to commercial properties or renters. Homeowners may also have to pay more for cover if their policy renews before April. Mr Pratt said: “Cumbrian homeowners should consider looking for another quote after April because even after paying a cancellation fee they may find another insurer will offer them a cheaper deal overall.”
Insurers said that it was still too early to assess the full scale of the damage in Cumbria but that they had teams on the ground helping people. Flood damage costs an average of almost £18,000 to repair, according to Lloyds Bank.
My property has been flooded. Where do I start?
The first thing to do is contact your insurer who can offer advice and get your claim moving. If necessary, arrange temporary emergency repairs to stop any damage getting worse but tell your insurer and keep any receipts because this will form part of your claim. When flood waters have receded your insurer will send a loss adjuster around to assess the damage.
Should I throw away damaged items?
Insurers say households should not be in a rush to throw away damaged items unless they are a danger to health because it is possible they may be repaired or restored. If you do throw anything out, take photos because that will assist your claim.
When should I start repairs?
It can take weeks, sometimes longer, for a property to dry out fully so do not be in a rush to redecorate. If in doubt, contact your insurer.
I don’t have home insurance, is there any help I can get?
Following heavy flooding last year the government offered a £5,000 repair grant to every affected home or business provided the money was spent on increasing resilience. However, this was only available to people flooded up to the end of March last year and so far no new scheme has been announced.