Flooding of homes, land and commercial property has been an irregular occurrence in the UK for some years and its predictability has been…..unpredictable. As witnessed during these early months of summer 2012. The Environment Agency estimate 200,000 properties at ‘significant risk’.
Owners and landlords have understandably looked to their insurers as a form of protection from flood damage although from June 2013 this may not be so easy when the ‘Statement of Principles’ between the Government and Association of British insurers (ABI) is withdrawn.
This arrangement has been in place for property at ‘Significant risk’ providing insurance cover to homes and businesses as long as plans were in place to reduce the risk to ‘Below Significant levels’ within 5 years.
Therefore home owners could be in breach of their mortgage covenants if they are unable to place adequate cover, business could be forced to operate with cover that does adequately reflect risk and rental could subsequently fall.
RPS recommends that occupiers, owners and landlords review their current level of risk via the EA website, speak with their insurers and understand what the risk levels are. If purchasing or letting property then the flood risk and likely insurance premium levels should now be raised higher up the due diligence ranking list.
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