house insurance by postcode

The floods experienced by large parts of the UK earlier in the year will have left in their wake much damage, both in a structural and psychological sense. For some, the best coping method is to consign the whole event to the darkest recesses of the mind and make a fresh start by claiming through a home insurance policy.

That’s if you were one of those lucky enough to have an active policy at the time of the flooding. Unfortunately, buildings and contents cover is not mandatory and many homeowners in the UK do not have any protection in place.

Mortgage lenders can insist on buildings cover being in place on the property before they will release the funds to purchase it. Those who would otherwise not have considered it will no doubt now be glad they were effectively coerced into it.

As I’m sure you can imagine, the damage caused during the flooding and the resulting repair bill was huge. In fact the final figure is said to stand somewhere between £2bn and £3bn.

The problem now faced by some homeowners is effectively a postcode lottery on their home insurance policy. Those living in areas prone to flooding, so-called “flood plains”, could find insurers unwilling to cover their property for flood damage under standard buildings cover protection.

This has left homeowners worrying what will happen if they try to sell their homes in order to move to an area with less risk of flooding. Will property prices fall in these areas? Will prospective buyers be put off viewing the property?

Then there is the issue of re-occurring floods: without insurance how will property owners find the money to pay for repair? News that insurers may have to increase the cost of their policies to factor in losses from flooding has heightened the fears of the public still further.

It appears that as a country we are simply under-resourced in the area of flood protection. The figure of £2.15bn promised by environmental secretary Alistair Darling over the next three years was not enough before the flood crisis and is certainly not enough now according to the Association of British Insurers (ABI), the industry trade body.

Stephen Haddrill, the director general of ABI, was recently quoted as saying that the government had not committed enough money to fund new and existing flood defences. This meant a major increase in spending would be needed if we are to solve the increasing problem of flooding in the UK.

In perhaps a sign of things to come the Environment Agency last month announced it would no longer be maintaining defences at the Blyth Estuary in Suffolk as it felt the cost of repairing them outweighed the benefit received.

This only goes to show that a house insurance policy that provides flood cover is invaluable at this time and if you have no cover in place you should certainly consider it, whether you live in an area prone to flooding or not.

Do you face a postcode lottery when it comes to your home insurance policy?

If you don’t have a house insurance policy in place you should consider it in light of the recent flooding. Can you really afford to fit the bill yourself?