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Floods: The importance of insurance

Posted on 2016-02-12

The recent floods have shown us the true importance of insurance, with thousands displaced from their homes and billions of pounds worth of damage caused. In this post, we look at the damage caused by recent flooding, how landlords and tenants can protect their home and belongings in case of future flooding, and why landlord buildings insurance is so important.

Damage caused by recent flooding

Analysts are currently estimating that the costs of heavy flooding across the north of England over winter could exceed £1.5 billion, with small businesses and property owners among the hardest hit. In fact, the storms and subsequent floods have caused so much damage that it’s thought that they may even knock as much as 0.2% off the UK’s economic output next year.

Even now, weeks after the floods, there are still severe flood warnings in place, with a further 100 less severe flood warnings and alerts across England and Wales*. You can see whether you might be affected by any of these warnings here and you can find out if you live in a flood risk area here.

Prime Minister David Cameron has promised to “spend £2.3 billion on flood defences in this parliament” in an attempt to ensure that the disaster isn’t replicated in the near future; providing Britain with better flood defences than ever before. He has also pledged to review the country’s flood defences.

However, in spite of this, a spokesman for the Environment Agency has stated that the UK’s weather is moving into a period of “unknown extremes”, which means that it’ll be harder for the UK to cope with increased rainfall and floods. As such, preparing your properties in case the worst should happen is vital to protecting both your tenants and your investment in case the floods hit yet again in the future.

How can you protect your home?

Making sure you’re properly prepared for any flooding is vital. Sophisticated flood warning systems now mean that landlords and tenants should have advanced notice of any impending floods. Mary Dhonau, a flood consultant, believes that you should write your own emergency household plan as soon as possible. This way, if a flood warning is issued, you’ll already know what to do, so there should be more time to prepare. If you have tenants in a home that’s prone to flooding (or you see that there’s a flood warning), it’s best to advise them of this.

If your home is at risk of flooding, the Environment Agency recommend “flood boards” to block doorways and air brick covers. This is because they’re far more effective for groundwater flooding than sandbags which can be cumbersome and take a long time to fill. If you can’t get any “flood boards” then sand bags are still advisable.

To prepare for a flood, you should ensure that your tenants unplug all electrical items and tie your curtains in knots so they’re away from the ground. If you or your tenants have a car at the property, be sure to move this to higher ground, if possible.

If flood water is approaching, you should ensure all your gas and electricity supplies are then switched off. Your tenants should move any possessions on the ground floor or in the cellar of your home upstairs if possible. If this isn’t possible for large objects, such as furniture, then make sure that they’re away from walls to prevent further damage. Ask them to notify you (or visit them) so you know exactly what fixtures and furnishings have been moved.

Most importantly, if the emergency services tell your tenants to leave the property, you should ensure that they do so immediately.

The real importance of insurance

Once you return to your property and assess the flood damage, it’s vital that you ring your insurers as soon as possible and start collecting evidence for your claim straight away. Try to take multiple photographs for this as it could help with the claims process.

If your landlord buildings insurance covers flooding then you should be able to make a claim; providing it meets the terms and conditions of your policy. We take flood cover seriously; if we’re unable to provide this, we’ll tell you when you apply for cover and confirm it in your schedule. The peril causing the property to become uninhabitable (in this case flooding) has to be insured by the policy in order for you to make a claim for alternative accommodation. You should read the general exclusions of your policy carefully before taking it out, as well as the policy and schedule wording so you’re confident you know what it includes.

If flood damage is excluded from your policy, or if you don’t have buildings insurance, then it’s likely that you’ll have to pay to have the damage repaired yourself. This could be highly costly. Depending on the nature of the flooding and the amount of damage caused, repairing a property damaged by floods could cost thousands of pounds; especially if there’s structural damage.

By having adequate landlord insurance in place, you’re protected and you can have the reassurance that your property has the right level of cover to suit your needs. As well as paying for damage, loss and the destruction of buildings, landlord buildings insurance can also cover the loss of rent and re-letting costs you may be faced with after damage caused by flooding.

Any loss where a part of your insured property was unoccupied prior to the loss unless verified by a tenancy agreement confirming future occupation.

When you research an insurance policy, you need to check what terms and conditions apply to any flood cover so you know exactly where you stand should you have to make a claim.

As always, there are terms, conditions and exclusions. In relation to loss, damage or destruction to Buildings, Contents and subsequent Loss of Rent and Alternative Accommodation in total for any one loss occurrence, our liability shall not exceed £500,000 or the Sum Insured; whichever is the lesser. The maximum we will pay out is the blanket sum insured of £500,000, for both property damage and loss of rent. So, depending on the property damage, the loss of rent cover may not provide the full £50k.

This is in addition to the standard exclusions for the cover (below) and is subject to the pre-selected excess.

• Any loss where a part of your insured property was unoccupied prior to the loss unless verified by a tenancy agreement confirming future occupation

• Any loss incurred once the damaged part of your insured property is habitable

• Any amount in excess of £50,000

Before taking out a Landlord Building Insurance policy, we would always recommend that you read the full policy wording and the policy summary together with your quote, if you have done this, the exclusions will be detailed in your schedule. This way, you’ll know exactly what you’re insured for and what to do in case of emergency or if you need to make a claim. We apply flood exclusions for some prone areas, so please carefully check the details of the policy you have and get in touch if you have any questions about your cover.

In summary, proper buildings insurance that covers flooding is essential if your property is prone to flooding, or if a flood warning is issued for your area, as it provides you with peace of mind. However, as we apply exclusions for some prone areas, remember to check your policy carefully. In addition, remember to properly prepare your tenants, your home and your contents for the prospect of a flood. An emergency household plan is perfect for this. Preparation is crucial and personal safety should always take priority.

Image courtesy of Shutterstock
*correct as of 13/01/2016

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