What is flood insurance?

What is it and why does flood insurance warrant its own name as a specialist category of property insurance?

After all, the risk of loss or damage to a property as a result of flooding is one of the standard risks typically covered by the standard forms of home insurance arranged by owner occupiers. Most insurance should cover any repairs that need to be carried out, perhaps by an Ellicott City water damage restoration company, for example, if they have been caused by floodwater.

Building and contents insurance, for instance, typically includes flooding along with other risks such as fire, storm damage, escape of water, impacts, theft and vandalism. But flood insurance remains a special case.

Flood insurance – a special case

Where a property has suffered flooding in the past, or is in an area that has been identified as vulnerable to flooding in the future – on evidence provide by the government’s flood planning service, for example – many insurers become more than a little wary about extending cover and may:

• reject your application for insurance cover for the property;

• accept cover, but in a policy that specifically excludes the risk of loss or damage by flooding; or

• charge a much higher than usual premium rate for the inclusion of flood cover and / or increase the amount of compulsory excess you need to pay in the event of a claim.

Indeed, after a succession of winters in which insurance claims surged as a result of flooding and many insurers reacted by making it still more difficult for property owners to secure the cover they needed, the government and the industry together devised a reinsurance scheme for insurers called Flood Re.

Under this scheme, participating insurers pay a reinsurance premium which funds the ability to charge individual customers a lower, more affordable rate for their insurance premiums.

Specialist insurers

But there remain some specialist insurers who have consistently found ways to ensure that the cover you need against the risk of flooding to your home is there when you need it.

Specialist insurers are also signing up to Flood Re in the continuing effort to ensure that flood insurance remains as affordable as possible – especially to those who own homes in areas most likely to be affected by such risks.

As the home owner and customer, you have no direct indication that the insurer is participating in the Flood Re scheme – it works entirely in the background. All of your dealings are conducted, as normal, with your insurer or broker, without you having any direct contact with Flood Re. You can take comfort in the knowledge that your insurance premiums are going to be lower than they might otherwise have been.

Finding out more

If you are worried whether your property is in an area likely to suffer flooding from either rising seas or swollen rivers, the government’s flood planning service identifies the risk to any property as high, medium, low or very low.

To discover the risk to your own property, you simply enter your postcode and street number and the interactive site does the rest, allowing you to see the selected area on a scalable map, which shows you which areas of the country are at greatest risk.