Do you need flood insurance?

News reports showing floodwater tear through homes have become so commonplace in the last few years that it is getting easier and easier to ignore them. When something seems to happen often, we tend to stop being concerned about it.

But if you own property you cannot afford to stop being concerned about flooding. Millions of homes in the UK are built on floodplains. Other properties are also at risk from flooding, as flash-floods can strike anywhere.

Unless your property is a tree house, the answer to the question ‘do you need flood insurance?’ is yes.

Flood insurance changes

Flood insurance generally comes as standard in all home insurance policies, including landlords insurance policies. This is likely to change in a few months time. The government negotiated an agreement with insurers back in 2008 that meant that they were required to keep offering flood insurance, even to those with homes in high-risk areas. This agreement is due to expire in July, and insurers are reluctant to replace it. That’s not surprising: they paid out over £1 billion on flood damage claims last year alone.

Counting the cost

Could you afford to absorb the cost of thousands of pounds worth of flood damage to your property? If you own several properties in the same area, remember that local flooding could hit them all. Bills could be astronomical. While your tenants need to have their own insurance to cover their property, any flood damage to the actual building is your responsibility.

It is important that you act now to make sure that you are covered. If you own property in a flood risk area, speak to your insurer to find out if you will still be covered in July. It may be that you will need to start looking at specialist insurance policies to get cover, and they could be costly. It is worth factoring those extra costs into your business plan now, so you don’t get any nasty surprises.

If your home is not in a risk area, don’t think that means you are not at risk. Double check your policy wording to make sure you are covered, and speak to your tenants to make sure that they need to cover their own possessions.