Flood insurance – getting the right cover

Flood insurance is normally included as a standard part of your buildings insurance, which protects you in the event of damage to the structure of your property. But this doesn’t include your belongings. If you want the contents of your home to be protected against flood damage too, you’ll need contents insurance.

If you live in an area considered to be a possible flood risk, you might need flood insurance in case of:

• a river or canal bursting its banks
• seawater flooding due to storms and/or a high tide
• surface water or rapid groundwater flooding as a result of heavy rainfall or a burst pipe.

Flood insurance covers the costs of:

• removing debris
• professional fees (such as solicitors, architects and surveyors)
• repair or replacing damaged furniture and belongings
• alternative accommodation while you can’t live in your home
• drying out, repairing and restoring your property and its fixtures and fittings.

When it comes to claiming for damaged belongings, the amount your insurance company will pay out depends on the type of contents insurance you have:

• New for old policy – your insurance company should pay out enough to replace all damaged items with new similar items (other than clothes, where there’s usually a deduction for wear and tear). Most policies offer this.
• Indemnity cover – you’ll only get the value of your possessions before the flood occurred. So, if your sofa needs replacing at a cost of £2,000, you’ll only get what the old one was worth, which might only be £200.

If you’ve been flooded, you can start cleaning as soon as you like – you don’t need to wait until your insurer has assessed the damage.

Make sure you take pictures of damaged goods and keep samples of things like carpets and furnishings to show your insurer.

You might need to move out of your home while the flood damage is repaired. But the amount of cover that insurance companies offer for alternative accommodation can vary.

It’s important to think carefully about the level of cover you take out.

If your cover is too low, you might need to move back into your home before the repairs are finished or foot part of the bill for alternative accommodation.

Has your home been damaged by water coming from inside your home, such as from a leaking or burst pipe? Then your insurer will likely class this as being ‘escape of water’ and not flooding. Most policies will cover this, but it’s good to make sure.

If the damage is due to a burst or leaking pipe, your insurer might want to ensure you took the relevant preventative measures. For example, ‘lagging’ pipes that are vulnerable to freezing.

The high cost of clean-up and repairs following a flood means it’s important to have insurance for both your home and its contents.

• If you rent your home, it’s your landlord’s responsibility – not yours – to have buildings insurance.
• Your mortgage company usually insists on you taking out buildings insurance, which will often include flood cover.
• Although contents insurance isn’t compulsory, the cost of replacing everything in your home would be so high that it’s a good idea to have contents cover.

If you’re struggling to find insurance cover that’s affordable, the Flood Re scheme might be able to help you.

Flood Re is a joint government and insurance industry initiative. It aims to help insurance providers offer more affordable policies to households with eligible properties affected by flooding.

Some properties don’t qualify for Flood Re, including farm outbuildings, certain residential buy-to-let properties and homes built since 1 January 2009.

It’s worth taking time to check all the details in your buildings and contents insurance policies that relate to flooding to make sure you have enough cover to protect you in the event of a flood.

It’s important to call your insurance company to query anything you’re not sure about.

New laws mean that it’s up to insurance companies to ask the right questions about what they want to know.

But if your property has a history of flooding, it’s important to tell your insurance company – even if they don’t ask.

The last thing you need is a hitch if you ever need to make a claim, especially when it comes to something as potentially distressing as flood damage.

An insurance broker can help you negotiate with insurers and arrange cover, if your property doesn’t qualify to be included within the Flood Re scheme.

The British Insurance Brokers’ Association (BIBA) can help you locate a regulated insurance broker who specialises in flood risk.

Brokers don’t normally charge you a fee for their services – they get paid commission by the insurance company instead.

The National Flood Forum is a national charity that gives independent advice on how to go about getting flood risk insurance.

They also publish a list of ‘flood friendly’ insurers.

Find out whether you’re at risk from river or coastal flooding where you live.

If you’re insuring a property in Scotland, it’s worth knowing that the Scottish Government doesn’t allow insurance companies to use this flood risk information when setting insurance premiums.

If you live in England, you can contact your local Environment Agency office to ask for more information on the level of risk in the area where you live.

You can ask the Environment Agency for what’s known as an insurance-related request letter.

These are free and include details such as:

• any planned improvements to reduce flood risk
• any dates when the area was previously flooded
• the most recent National Flood Risk Assessment that was carried out.

This will help present your risk profile to insurance companies in the best possible light and will highlight things you can do to reduce the risk.

To increase the chance of insurance companies being able to make use of the information, make sure that the survey is as detailed as possible and include facts and figures about the level of flood risk to the property.

Here are some things you can do to reduce your flood risk:

• sign up for flood warnings
• join a flood action group
• instal products, such as flood boards and air-brick covers, that can help keep flood water out of your home
• move boilers and electrical points, as well as valuables and important documents, to a higher point above the likely flood level
• campaign for improvements to flood defences in your local area by working with your local authority and getting involved in public consultations.

You can ask your insurer to cancel your policy at any time, but there are a few things to be aware of: 

• if you have a mortgage, your lender usually requires you to have buildings cover in place

• you won’t earn the current year’s no-claims bonus if you cancel midway through

• you’ll usually have to pay a cancellation charge, unless you’re at renewal.  

If you’ve paid upfront and haven’t made a claim, you’ll receive a refund for the remaining months – minus any cancellation fees.