Home insurance applications rise 300% in flood-hit areas
Thousands of homeowners in some of the UK’s worst-affected flood areas are applying for home insurance for the first time in the wake of last month’s catastrophic downpours.
Immediately after the flooding, applications from residents in Sheffield, Doncaster, Hull, the West Midlands and parts of Scotland leapt by up to 300%1 in June compared with the previous month on the moneysupermarket.com price comparison website.
Richard Mason, director of insurance at moneysupermarket.com, said: “The increase in the number of people applying from areas affected by heavy rain is no surprise.
“Clearly, homeowners who narrowly escaped the floods this time have realised that without any insurance cover they could be left footing bills for tens of thousands of pounds in the future. Annual home and contents insurance on typical homes in areas such as Doncaster, Sheffield, and Edgbaston can be as little as £101 to £117.”
“If the government ever reneges on its part of the deal to build more flood defences, then cover may either be withdrawn or premiums spiral to as much as ten times current costs
Richard Mason, director of insurance at moneysupermarket.com
The surge in applications comes amid reports that insurers are considering the possibility of blacklisting up to one million homes built on flood plains.
According to the Environment Agency, about 2.3 million homes are built on flood plains. With 40% of property owners in the UK electing not to have home insurance, there may well be over 900,000 homes on flood plains without cover at the moment.
Mason added: “At present, the evidence suggests premiums have not yet risen in the aftermath of the floods. In an attempt to maintain market share, insurers may well absorb much of the claim costs from reserves. However, if the government ever reneges on its part of the deal to build more flood defences, then cover may either be withdrawn or premiums spiral to as much as ten times current costs.”
1. moneysupermarket.com saw increases in home insurance applications across the board and of over 300 per cent in HU2 (Hull) and S1 (Sheffield) in June 2007 compared with May. moneysupermarket.com saw increases in home insurance applications across the board and of over 300 per cent in HU2 (Hull) and S1 (Sheffield) in June 2007 compared with May.
