The wettest June since records began, followed by an equally miserable July, led to severe flooding in many parts of the UK. Industry sources state that more than 3,000 properties have suffered water damage since May.
The Government and the insurance industry are continuing to debate the issue of flooding in order to reach agreement on how best to provide affordable cover to high-risk homes that is fair for both homeowners and insurers. It has been proposed by those within the insurance sector that the new scheme could add 10 per cent to the average home insurance premium.
Currently, under an agreement called the Statement of Principles, most homes pay a small sum on the cost of their premiums to subsidise part of the insurance of high-risk homes so that insurance cover remains available for all. This agreement is due to expire next year, when most insurers are expected to redress the shortfall through premium hikes for all.
For those who have never suffered flooding and are unlikely to, and for those whose incomes are already stretched, this will not be a welcome decision. But if no solution is found, homeowners living in risky areas could find themselves without insurance and unable to sell or remortgage their homes.
While not great news for policyholders, these changes do provide brokers with a golden opportunity to get back in touch with their database to renew cover and assess clients’ changing circumstances.