Changes To Flood Insurance May Impact On Home Sales
On 30 June 2013, the ‘Statement of Principles’ agreement between Government and the insurance industry, which states that insurers will provide insurance for ‘at risk’ homes, comes to an end. This could make obtaining affordable flood insurance extremely difficult, if not impossible.
If customers cannot get insurance, they will be breaching the terms of their mortgage contract. It could also negatively impact on the valuation of the property, potential mortgageability and future saleability affecting both the homeowner and lending organisations.
And, based on the annual renewal of insurance policies, homeowners and the property industry have until June 2012 to address this issue.
Based on the 2008 RMS 1,000-year Inland Flood risk zones map, one in four homes in the UK are considered ‘at risk’ of flooding.
The ‘Know Your Flood Risk’ campaign is urging the mortgage industry to develop a flood risk strategy that responds to the planned changes so homeowners are fully aware of their obligations regarding flood insurance.
A number of homeowners are struggling to find affordable insurance and have seen the cost of their insurance increase by two thirds and the excess amounts rise to around £15,000 to £20,000.
There are many steps that homeowners can take to ensure they are prepared and will reduce the impact of flooding, such as receiving alerts from the Environment Agency and thereby giving them time to prepare their home, and using products that stop the water from entering the home.
Further useful information can be obtained from;