Lessons learned from the floods
The sheer scale of storm and flood damage between December and February took many property owners by surprise and some found to their cost that their insurance cover didn’t protect them as much as they’d hoped. In preparation for the winter ahead, what should landlords be mindful of with their property insurance arrangements?
More sophisticated insurance analysis
Insurers’ analysis systems are increasingly drawing on more sophisticated ‘flood-related’ data when setting a property’s insurance terms. These accurately pinpoint flood risk by assessing aspects such as drainage capability in the area and risk of surface water flooding.
Even if your properties are not in a historic flood-risk area, do check your insurance renewal documentation when it arrives. You may face increased terms due to newly identified risks.
Don’t risk being under-insured
Ahead of the winter storm season, it is also sensible to discuss with your insurance broker that your current insurance arrangements give you sufficient cover for:
• Repairing any storm/flood damage and conducting the necessary clean-up
• Loss of rental income/alternative accommodation for tenants during that time
Also check your policy gives sufficient time to cater for lost rental income and/or the cost involved from displaced tenants due to delays typically incurred in investigating the flood damage, undertaking repairs/ drying out the property and cleaning it. Many policies hold an indemnity period of just 12 months but for seriously flooded properties, this may not give enough time to make the property safe and habitable again.
Be prepared
In March this year the Government pledged £140m for immediate repairs and maintenance to damaged flood defences across Britain. However, there are steps property owners can take to help minimise some of the damage flooding can cause. These include installing specialist flood doors, removable air brick covers and having raised electrical sockets in the property. See the advice from the National Flood Forum - https://nationalfloodforum.org.uk/wp-content/uploads/Ready-for-flooding.pdf.
Landlords are also advised to sign up to the flood warnings issued by the Environment Agency - https://fwd.environment-agency.gov.uk/app/olr/register. These can alert them to offer support to tenants and ensure as many precautions to protect the property are put in place in the limited time available.
Summary
With forecasters predicting further extreme weather conditions for the UK, flooding will continue to be a major issue. Finding affordable insurance cover for residential and commercial rental properties in areas at risk from flooding will become harder. Landlords may wish to commission a property-level flood risk survey from a chartered surveyor or civil engineer to assess the risk potential of their property and help their negotiations with insurers.
Also, for those landlords looking to buy property to add to their portfolio, it is important to check the flooding history and risks of each potential premises. The proposed “Flood Re” fund aimed at providing affordable flood insurance cover to high risk premises will not be available for rental properties (among others) and the insurance industry will, no doubt, be more reluctant to cover those seen ‘at risk’.
*John Lanning is a director of Robinson Buckley Insurance Brokers Ltd.
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