Flood Insurance Proposals

Flood Insurance Proposals

The wet and windy weather is showing no signs of stopping and images of flooded properties, roads and villages continue to feature in the national news.

With many properties experiencing some level of flood damage, landlords are being advised that the government’s plans to ensure flood insurance is made widely available will not extend to privately rented accommodation according to the Residential Landlords Association.

The RLA is urgently seeking clarification from the Government over its flood insurance proposals that are currently going through Parliament.

Aiming to ensure that flood insurance remains affordable the ‘Flood Re’ scheme is to be made available to home owners who are at a high risk of flooding.  In conjunction with the Association of British Insurers, the scheme is designed to provide a fund to those who might struggle to get affordable flood insurance with cover at a set price.

Insurers would put into the fund those at high risk of flooding that they feel they are unable to insure themselves, with the premium to cover the flood risk part of the household cover capped.

Landlords were led to believe that their investments would be covered; however the Government’s response to the consultation on the scheme concludes that properties where the owner does not reside would be excluded.  This means landlords and tenants may not be able to obtain affordable insurance cover and would therefore have to meet the full cost of any damage.

The document explains: “For properties to be eligible for Flood Re, they would need to be insured in the name of an individual, they would need to have been allocated a Council Tax band; be used for residential purposes; have an individual premium; and be occupied by the policyholder or immediate family.”

Kerry Frost, Property Manager at Martin & Co Crawley said “Whilst in Crawley we are not seen as a high risk to flooding many of our landlords have properties spread over the UK.  If landlords are unable to obtain insurance or can only obtain on prohibitive terms it could place them in breach of their mortgage”.

If you are a landlord and have any questions regarding insuring your investment or any property management queries please call the team on 01293 735000 or email crawley@martinco.com.