Double-check Your Flood Cover

Severe floods across South Yorkshire last month (November 2019) created many negative news headlines. A month later, many property owners know they will have to endure a long wait before their claims’ settlement comes through. In other cases, claims have been turned down by insurers, because policies did not cover flooding.

Luxury accommodation and spa owner, Pam Webb, has suffered the shock of having her claim declined. The devastated owner of a four-year-old business has now been told there is no insurance in place to cover her for the losses she has suffered, which have not just affected her property, but also her business and livelihood too.

This is due to a flood exclusion in Ms Webb’s policy, which was in place even though Fishwick, where she lives, has experienced no flooding in the last century. Given that her home and business premises were one and the same, there is no help available from schemes that are in place to help those whose homes flood.

A Flood Re scheme, established in 2016 as a response to severe flooding in the preceding years, offers lower premiums and affordable cover to around 350,000 homes in flood-prone parts of the country. It does not, however, cover commercial properties.

The Flood Re scheme also excludes homes built since 2009. In total, 1.7 million households are ‘ineligible’ for the benefits it offers. This could be the tip of the iceberg, however, as there are many more domestic properties that could be considered ‘outside the scheme’, because the insurers of these do not reinsure through Flood Re. This could be the case in areas of low flood risk. Consequently, both commercial property owners and those domestic homeowners insuring newer properties, need to consider whether or not their insurance policy would cover flooding.

The huge upset suffered by those businesses who are uninsured, points to the need for commercial property owners to find a commercial broker who can professionally advise them on their insurance protection. A broker should be able to confirm whether or not a postcode is identified as a flood-prone area, as insurance companies have access to flood data. To make doubly sure of what protection would be offered, insurance purchasers should specifically quiz their broker or insurance provider on this point.

If you do have a business running from your domestic property, there is another good reason to talk to a commercial insurance broker, who can discuss all your needs, get you the most affordable package and keep your policy excess to a reasonable sum. Those protected under the terms of the Flood Re scheme have a £250 excess cap, but this is not the case for those not eligible for this scheme.