Posts with tag: home insurance

Insuring Your Flood Risk Property

Published On: December 14, 2015 at 5:05 pm


Categories: Landlord News

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After the recent extreme weather in northern England, many property owners will be worried about their insurance – how high will my premium be? Will I even get a policy?

But don’t fear. This guide should help you understand how you can sufficiently insure your property.

The risk

About 5m homes, or a sixth of all properties in England, are considered to be at a higher than normal risk of flooding. However, only around half are at risk from rivers or the sea. Rising groundwater, sewer problems and flash flooding could hit the rest.

The Association of British Insurers (ABI) found that just 55% of those living in flood risk areas are aware that their properties are at risk.

Check your property’s risk of flooding at

Insurance costs

When looking into a home insurance policy, one of the first questions you will be asked is, “Has your home ever flooded?” If you answer yes, you will be asked a lot more questions, your premium will be significantly higher or you may be refused.

Insuring Your Flood Risk Property

Insuring Your Flood Risk Property

Under the terms of an agreement with the Government, insurers should continue covering their existing customers. However, they are free to raise premiums or set extremely high excesses for flooding claims, meaning that many homes remain uninsured. If property owners wish to move to a new insurer, they could be declined altogether.

If you are moving to a high-risk area, it is likely that you will not be offered affordable flooding cover. However, from next year, a new scheme could help you (see next section).

It is definitely worth using a specialist insurance broker or comparing policies yourself – some insurers will calculate the risk better than others. If you have not had any previous flooding incidents, cover should be included in a standard domestic policy.

Most buildings policies will pay to return the property to a habitable condition and for alternative accommodation while work is being completed, which can last nine months or longer.

Contents policies will often replace old items for new up to the maximum payout limit, but not all cover this, so check before you buy.

Flood Re

From April 2016, a new scheme will help alleviate the costs of sky-high insurance. Flood Re will help individual insurers share the flood risk element of a buildings and contents policy; the scheme will pay out future claims for flooding. The initiative is aimed at helping the estimated 350,000 households at significant flood risk who struggle to access affordable insurance.

Under the scheme, there are maximum charges in place that the insurer will ask the consumer to pay for the flood risk component of the policy. This is set by Council tax bands, starting at £210 per year for homes in bands A and B and up to £1,200 a year for band H. This applies to both buildings and contents cover. Consumers buying just one of these will pay less, but this is just for the flood element – the total premium will be higher.

A homeowner in band D will pay £168 to Flood Re for buildings cover, or £108 for contents-only. This may sound like a lot, but will be a huge saving for those in high-risk areas.

Consumers will not have to work out the deal themselves – their insurer will offer them a single premium and the premium will be paid to the scheme. Claims will be handled similarly as they are now, by the insurer.

It is unknown how the scheme will be able to deal with a catastrophic event, but it will help at-risk households access the cover they need at a better price.

Companies and retailers in recently affected areas are not happy that Flood Re does not include business cover.

Buying a property

If you are buying an existing home, the vendor must tell you about any significant flooding incidents when they complete the Law Society’s property information form for conveyancing. Any issues will become clear when you apply for a mortgage, as banks won’t lend money on a home likely to be destroyed by a major flooding event.

The ABI reports that around 20,000 homes are built in flood risk areas every year, including 4,000 in significant risk spots. This is part of the reason the Government has been developing the Flood Re scheme, to ensure there is cover in future.

When the worst happens

Some people that have been hit by serious flooding have compared the experience to a death in the family. They also warn of the difficulty in finding rental accommodation in the days afterwards. If the worst happens to you, the first thing you should do is get on the phone to letting agents – the best rental homes soon go.

After the summer floods of 2007, 2,400 people in Humberside spent months living in caravans, as there was nowhere else to go. However, a caravan could be a good idea. Some residents of Carlisle lived in caravans parked on their drives. This meant that they were around to help the builders when their homes were being rebuilt.

Also be aware that you may not have to throw out as much as you think – furniture may not have been contaminated and can be restored.

The outcome of your insurance claim also seems to depend on the quality of the loss adjustor appointed. In some cases, victims have had to find their own in order to receive fair treatment.

And remember, it is possible to flood-proof your home – install solid flooring and electrical wiring halfway up the wall, which will make a huge difference to rebuilding your property if it is hit.

Home insurance premiums drop by 6.6%

Published On: August 10, 2015 at 3:32 pm


Categories: Finance News

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Encouraging news for property owners looking to switch home insurance provider came in new research conducted by Consumer Intelligence.


The market research provider indicated that the cheapest home insurance premiums dropped by 6.6% between June 2014 and 2015. However, 35% of this fall was recorded in just two months-between April and June of this year, when the average of the lowest five premiums dropped by 2.3%.[1]

In total, the average of the five cheapest home insurance policies in June 2015 was £115, a reduction of £13 from one year previously. Consumer Intelligence believe that with such a sharp fall in average insurance premiums, those looking to change provider could enjoy substantial savings.[1]

Home insurance premiums drop by 6.6%

Home insurance premiums drop by 6.6%


Consumer Intelligence’s Switching2 Index shows that from in excess of 11,000 home and motor policyholders, 35% of home insurance customers changed provider in the year to May. Half of those did so in order to benefit from lower premiums.[1]

Between June 2014 and 2015, the average of the cheapest five home insurance quotes for people aged over 50 dropped by 6.8%. As a result, this age group pays around £106 for their home insurance. For people under 50, the figures are 6.3% and £125 respectively.

Ian Hughes, Chief Executive of Consumer Intelligence noted, ‘this fall in premiums can be explained by a big reduction in burglaries and far fewer claims for flood and storm damage. In 1995, just under 9% of homes suffered from a burglary, compared to a little under 3% last year. Those switching home insurers this year could see significant savings.’[1]




Britons Don’t Admit Breaking Items in the Home

Published On: July 5, 2015 at 12:32 pm


Categories: Landlord News

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Two out of five Britons do not take responsibility for breaking an item in the home, revealed new research.

55% would try to repair what they had broken and 40% would buy a replacement without telling anyone, found the study by Direct Line.

Accidental damage is most often blamed on siblings, with over one in five people admitting to blaming a brother or sister. This is followed by partners, who are blamed in 18% of these situations.

Britons Don't Admit Breaking Items in the Home

Britons Don’t Admit Breaking Items in the Home

Meanwhile, women are more likely to blame someone or something, with 22% confessing to this, compared to one in seven men.

But do not be surprised if you have broken something this week, as 1st July typically records a 60% rise in accidental damage claims, compared to the annual average.

Direct Line Home Insurance’s Katie Lomas, says: “Accidents happen and are often unavoidable consequences of our busy lives. However, with ever increasing numbers of expensive gadgets and furniture in homes, this can mean people are faced with hefty costs to fix or replace items.

“If you accidentally spill coffee on your partner’s laptop or your drop your phone down the loo, with the right insurance, you needn’t worry too much.”1

The cost of home insurance is decreasing, with figures reported in the first three months of this year revealing a sharp fall in the average premium quoted on a new policy.

The British Insurance Premium Index found that the average quote for a combined home buildings and contents insurance policy declined by 3.6% (£6) to £158.66. In 12 months, the typical shop-around quote for a combined policy dropped by 9.6%, almost £17.

The shop-around average is calculated by using the five cheapest quotes for each customer in a nationwide selection of risks and based on prices from direct insurers, brokers and price comparison sites.

Research also found that the cost of a buildings policy fell by 3% in the first quarter (Q1) of 2015, to £112.74, equating to 10.1% in a year. The cost of a contents policy decreased by 2.3% to £60.28 in the same time, equivalent to 8.2% in 12 months.


Cost of Home Premiums Dropped in Q1 2015

Published On: April 21, 2015 at 12:41 pm


Categories: Property News

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The average cost of home insurance premiums has decreased by 3.6% due to mild weather.

The average premium for a new home insurance policy fell in the first quarter (Q1) of 2015, found the latest AA British Insurance Premium Index.

Cost of Home Premiums Dropped in Q1 2015

Cost of Home Premiums Dropped in Q1 2015

The data reveals that the average quote for a combined home buildings and content insurance policy declined by 3.6% (£6) to £158.66.

Furthermore, the cost of a buildings policy dropped by 3% to £112.74 and the cost of a contents policy fell by 2.3% to £60.28.

Premiums have consistently dropped over the last year, with the average cost of a combined policy down 9.6%, the average buildings policy 10.1% lower and a contents policy falling 8.2%.

The study also found that car insurance premiums also fell slightly in Q1.

Managing Director of AA Insurance, Janet Connor, says that the decreases are greater than anticipated but mirror a long period of benign weather.

She explains: “Home premiums are most likely to be affected by extremes of weather and the recent winter has on the whole been notable for its lack of heavy rain, snow, winds and extreme temperatures.

“Nevertheless, climate change is a reality leading to some parts of the world suffering catastrophic weather events over recent months. This should serve as a reminder that the weather can produce unexpected extremes and the UK is not immune.”

Connor says that the reason for the lower premiums is that claims in the last three years have been within insurers’ capabilities.

She also notes that that the average does not expose regional differences and that those living in areas most at risk of flooding will pay more for their insurance.

She adds: “The Flood Re insurance scheme, designed to enable those in at-risk homes to obtain affordable insurance cover, will help thousands of families.”1

Read more about Flood Re here: /flood-re-is-wasting-homeowners-money/ 


Flood Re is Wasting Homeowners’ Money

Published On: February 5, 2015 at 10:12 am


Categories: Property News

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The Government scheme Flood Re, introduced to make home insurance more affordable for those living in areas at risk of flooding, is wasting homeowners’ money, experts claim.

The system covers insurance premiums for properties on flood plains, using a £180m tax on all other families’ home insurance.

The Committee on Climate Change (CCC) was created to advise the Government, and has stated that the costs of Flood Re are three times greater than its benefits.

However, the Department for Environment, Food and Rural Affairs says that the scheme makes insurance accessible and affordable.

The CCC is hoping the tax on everybody’s premiums will be reduced. Furthermore, it says that cash should be available to prevent flood damage, instead of just when homes need to be cleaned up after a flood. The CCC thinks that Flood Re is too generous.

Around half a million properties will see their insurance capped under the system. However the CCC believes that just 200,000 of these homeowners would actually struggle to afford their insurance without the assistance.

Flood Re is Wasting Homeowners' Money

Flood Re is Wasting Homeowners’ Money

The CCC says that the cost of Flood Re does not correspond to ordinary Government spending rules, as it offers negative value for money.

Sir John Krebs, chair of the CCC’s adaptation sub-committee, explains: “Flood Re is set to subsidise many hundreds of thousands of households more than the estimated number that might struggle to afford cover in the free market. This makes Flood Re needlessly expensive.”

Sir John has called for the scheme to be reduced and the emphasis changed: “Managing flood risk will always be the best way of securing affordable insurance in the long term. A transition should be achieved by helping high-risk homes become more resilient.

“There is a risk that Flood Re will be counter-productive to the long-term management of flood risk in the UK, as it largely removes the financial incentive for households to take steps to avoid being flooded. As a consequence, the industry levy funding the scheme could spiral.”1

He has also advised managers of the scheme to properly explain to homeowners that they must restore their property to a more resilient state if they do get flooded.

Ministers and the Association of British Insurers (ABI) introduced Flood Re in June 2013.

The scheme was not supposed to make a profit, but the CCC says that insurers benefit from it because their own risk has been reduced.

The Environment Agency predicts that more properties will be at risk of flooding in the future.

The CCC says that Flood Re should be raising awareness, as many of those living in high-risk homes do not know they are living on flood plains.

Read more about the regulations surrounding Flood Re here.