Check your flood insurance to ensure it offers adequate cover

Christina Hoghton
Written By:
Christina Hoghton

It takes one to two years to fully dry out a flooded property, but some policies only cover the cost of alternative acommodation for six months

Flooding victims are being left high and dry, as insurance ‘lags behind soaring accommodation costs’, according to Defaqto.

Analysis of the home insurance market by the financial information business found that many home insurance policies may not include enough cover for those who are forced out of their homes by flooding.

While rents have increased by over 25% in a year in some areas, insurance cover has not caught up.

Some home insurance policies only offer up to £15,000 for alternative accommodation, which is equivalent to six months’ rent for a house in London. But it can take between one and two years to fully dry out a house that has been flooded to make it habitable again.

Defaqto added that the problem is likely to be made even worse by the shortage of available builders in the current labour market, as well as a shortage of building supplies.

Check your cover

The business is encouraging those that are concerned about flooding to check their home insurance cover.

Depending on your property and local rental market, some insurance policies might not provide enough cover to pay for the total cost of alternative accommodation, leaving you well out of pocket and facing financial hardship.

Anyone who is worried about being affected by flooding should check their cover for storm damage, and in particular the amount of cover for ‘alternative accommodation’. This is the maximum sum that an insurer will pay for the costs of moving and temporary housing while your home is being repaired following flood or storm damage that makes it uninhabitable.

Brian Brown, consumer finance expert at Defaqto, said: “While there are obvious things people can do to protect their homes against flood damage, including very carefully choosing the place to live, climate change is making a mockery of even those decisions as we experience flooding in areas which were previously thought to be safe.

“If you are unlucky enough to have your house damaged by storms and flooding, home buildings and contents insurance is intended to pay for any damage, provided you have cover. Buyers should beware of the insurance small print and check their cover. Many people underestimate just how much those costs might be and are caught out.

“Many policies have not increased their limits in line with the current rental market and homeowners could be caught out if they have to be out of their property for an extended period for repairs.”