Mortgage lenders will not lend on houses that are uninsurable and as a result that value can fall by up to 80% .
Based on the recent survey, 6.5 million homes are already at risk from flooding of which 1.5 million are in high risk areas. The government has completed flood defenses in many further areas 120,000 new homes planned for the Thames Gateway which are potentially in a high "at risk" zone. Yet many areas remain vulnerable. And if global warming continues, by 2030, the 1.5 million at risk could mushroom 3.5 million. Back in 2003 the Association of British Insurers (ABI) agreed the principles that committed UK insurers to offering home and contents insurance for properties in areas The rider was that the flood defences had to be already in place or would be completed by the end of 2007.
The Department for Environment, Food and Rural Affairs (DEFRA) has the responsibility of developing and maintaining these responses of insurence industry there 's concern that insufficient progress is being made. As a result the insurers have warned the government that could have been a widespread withdrawal of insurance cover if progress is stepped up.
Whilst the insurance industry agreed to provide insurance cover, their commitment was simply to maintain premiums at "reasonable" levels. But there was no definition of what " As a result premium increase of 60% have been common with up 400% increases in bad areas. In a tiny number of cases, cover has has withdrawn altogether, mostly in country areas where DEFRA considers the cost of defending a cluster of a few homes to be uneconomic.
Environmentalists warn that unless DEFRA gets it & # 39; s skates on, the UK & # 39; s current bill for flood damage could rise from £ 950 million a year, to £ 3.2 billion. After all, the average insurance claim for household flood damage is £ 30,000 - that even more than fire damage. And localized events like the 2004 flood at Boscastle, Cornwall, can cost the insurers over £ 15 million.
This is DEFRA & # 39; s web site where you can check check if you have any doubt whether your home or proposed home, is in a flood risk area, you should visit http://www.environment-agency.gov.uk. Their maps are originally designed for planning purposes and providing information on a post-code basis.
Whilst many insurers use the DEFRA information, you may may More than one thumb, have their own flood maps. This means that you have your own insurer increase your premium for flood risk and uses the DEFRA information, you may s own flood data if its data identifies that your property is beyond the "at risk" zone.
The ABI has been recently added to the pressure on the construction and upgrading of the flood defense. The spending on flood defenses, the insurance industry may not continue their commitment to the 2003 principles.
That would be bad news for many homeowners.
