The UK’s Worsening Flood Problem – Flood Insurance News

We are all familiar, I’m sure, with the recent spate of flooding across the UK – it has been front page news more often than not, but upon researching some interesting statistics, questions have to be asked. What does the future hold for the UK in respect of flood management and flood insurance? Both of these are the key points.

If we take into consideration that rainfall records began in 1910, four out of the five wettest years ever have been since 2000 (which was the wettest year ever recorded with 1337.3mm of rainfall). Only 1954 makes it into the top five from the 20^th Century. Some may argue that this constant average increase is down to climate change and global warming. According to NASA, 2013 was the fourth warmest year, again, since records began. Others may argue that the sheer amount of surface water from the constant new building of towns and cities has put drainage systems under impossible pressure. Whatever the truth, the figures speak for themselves.

Take 2012 for example (only 6.6mm less rainfall than 2000) – We know from statistics from the Association of British Insurers that insurance companies received 411,300 flood and storm damage claims totalling £690m for damage to homes, 47,000 claims for commercial properties totalling £373m plus another £40m in business interruption payments and 27,000 claims for flood and storm damaged vehicles totalling £84m. Only 2007 saw higher payouts with a staggering £3billion claimed.

Flood Insurance Industry

The government has liaised with the insurance industry and the ‘Flood Re’ scheme is due to take effect from 2015. This scheme, in my opinion, is fundamentally flawed, the reasons for which I will come to. The scheme essentially sets out to cap the flood element of a homeowner’s insurance premium, and will be rated by council tax bands. Bands A and B will be capped at £210 rising to £540 in band G, and there’s the first flaw. The scheme will not be available to homes in band H as it is assumed that everyone living in this band is wealthy and does not need the help. My first thoughts are however that many people living in band H are not necessarily that wealthy, be it from the fact that the home may have been inherited or the occupants are pensioners. Many of these properties would be rendered virtually unsaleable. Other flaws that I can initially see are the facts that the scheme will not be available for rented property, thus potential misery for landlords and tenants alike, and also the fact that the scheme will not be available for any property built after 2009. The reason given for this is that it is to deter future building on potential flood plains, essentially a good enough reason except for the fact that the last time I looked, 2009 was in the past and not in the future. Some may argue too that the £10.50 to be levied on every homeowner’s insurance premiums to facilitate the Flood Re scheme is unfair. There has also, as far as I can see, been absolutely nothing said as regards capping insurers’ excesses on flood claims.

So what about prevention rather than cure?

It seems to be widely acknowledged that for every £1 spent on flood prevention, another £8 is saved on damage repair and economic stability. The government’s figures on flood defence investment show that in real terms, central government spending is down as local authorities are encouraged to invest. Figures from varying agencies including DEFRA (Department for the Environment, Food and Rural Affairs) and the National Audit Office speculate that the cost of flooding in general in the UK by 2080 could reach as high as £12billion per annum as opposed to the current £1.1billion, based upon future population growth and if serious preventative measures are not taken. The floods so far in the UK between December 23^rd 2013 and January 5^th this year have already affected 1,700 properties and left seven people dead, with more flooding expected throughout January.

Whatever the arguments as to whether the insurance companies should be responsible for flood defence investment, a certain amount of responsibility has to be borne by the householder or business owner. In the same way that if you buy a house next door to a pub, the likelihood is that there will be a degree of noise at turning out time, a building on a flood plain is going to realistically have more of a chance of flooding than one built on the top of a hill, so there are many preventative measures which the owner can effect. For example, in the short term:

• Make a list of important phone numbers, such as your utility suppliers and your home and car insurance providers.
• Block possible water entry points such as doors, windows and airbricks with sandbags.
• Move your valuables upstairs or as high off the ground as possible. Keep important documents in a waterproof container.
• Unplug all electrical appliances, turn off your gas, electricity and water and remember never to enter standing water if the electricity supply is on, or if you’re unsure.
• Make a survival kit with food and drinks, a torch, a fully-charged mobile phone, warm clothes, and blankets.
• Move your car to higher ground.

And in the longer term:

• Take up carpets downstairs and fit sealed wood or ceramic tiles or concrete.
• Install flood skirts or barriers at water entry points, such as doors and airbricks.
• Keep flood barriers to hand to use on doors, airbricks and cellar openings.
• Install no-return valves on water outlet pipes.
• Check drains regularly for blockages.
• Fit water resistant doors, window frames, and re-fit skirting boards or use water resistant sealant on existing doors and windows.
• Raise electrical sockets as high as is practicable.
• Re-plaster walls with waterproof lime plaster and install a chemical damp-proof course.

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