Flood insurance warning

Posted: 28th August 2012

The 2009 agreement between the Government and the Association of British Insurers which currently ensures that all properties are insurable against the risk of flood ends in June 2013.
Since 2009, work on flood defences has proceeded much more slowly than was anticipated when the agreement was concluded. The result is that hundreds of thousands of buildings will be potentially uninsurable against flood as opposed to the very small number of ‘problem cases’ expected in 2009.
The inability to insure against the risk of flood will pose significant problems for property owners and occupiers, prospective sellers or lessors of such properties and securing mortgage funding for such properties will be significantly impaired.
Some owners with mortgages may be pushed into default of their obligations to their lenders to keep their properties insured against flood risk.
Owners and occupiers of properties in flood risk areas should consider the potential implications of the expiry of the agreement to ensure they are not faced with a nasty surprise.