An Englishman’s home is his castle? Provided it’s not under water.

Tougher planning controls are needed if flood insurance is to remain widely available for new homes the ABI (Association of British Insurers) said today (14 February). Of the three million new homes the Government plan to be built by 2020, a third will be on the floodplain.  “Home and Property” are also expressing concern:

ABI’s Assistant Director of Property, warned: “The Government’s ambitious housing plans are in jeopardy unless we reduce the flood risk. In the last year 13 major developments have been given the go ahead despite Environment Agency advice on the flood risk. Where a local authority plans to ignore flood risk advice, the Government should step in and review the proposals and be compelled to publish their decision. Insurers want to continue to provide flood cover, but poor planning decisions will lead to more homes becoming unsaleable, uninsurable and uninhabitable.”

Unda’s view of this

 So what does this mean?  The simple answer is know your risks. “Caveat Emptor” has never been more relevant to the property sector as it is today.  Flooding was once monitored in 50 and 100 year flooding events (return periods), occurrences which were accepted and borne solely by the insurance sector as a cost of them doing business.  Not anymore.  Insurance companies are either declining cover altogether and / or significantly modifying their policies to increase the self-insured retentions paid by the insured in the event of a claim.  Self-insured retentions of £25,000 per claim are now not uncommon.  Once again, we recommend you know your risks.  Mortgage companies are also looking at flood risk in a different light, preferring not to be exposed to residential and or commercial assets that are going to be repeatedly blighted by flooding.  Unda echoes the concerns above, know your risks, otherwise it might lead to properties becoming unsaleable, uninsurable and uninhabitable.