Floods highlight need for cover

When it rains, it pours - and for thousands of homeowners who were left devastated by the latest bout of storms to hit the UK the costs are quickly adding up.

During the floods of 2007, around 165,000 home insurance claims were made with around £3billion of loss covered by insurers. This time around the losses are unlikely to be as high but this is little consolation to those whose homes have been flooded and with the Met Office predicting more bad weather to come, homeowners should ensure they have an appropriate level of home insurance in place.

Earlier this year the Financial Ombudsman Service revealed that it had seen an increased number of complaints from homeowners who had home insurance claims rejected, highlighting the importance of checking your cover is adequate.

According to the AA British Insurance Premium Index, the cost of an average buildings insurance policy has increased by 4.3% since last year’s floods while contents insurance has increased by 3.3%. With premiums rising, you should shop around for home insurance with a comparison website to ensure you’re getting a competitive deal. Most insurers offer their best rates to new customers with discounts for shopping online – so even though premiums are rising you can still make savings.

Protect yourself against more storms
If your home has already been flooded, you should take photographs of any damaged items and keep any ruined property as it may help you settle a claim. If the damage occurred due to localised weather, get a weather report from the internet. Contact your insurer and report any damage as soon as possible and don’t carry out any redecorating work until your insurer has settled your claim.

Before further storms strike, there are a number of measures that can be taken to protect your property – insurers expect policyholders to do all they can to minimise a claim so take all the steps possible to avoid damage. Around 90% of flood damage is caused by the first inch of water entering a property, so use flood protection equipment such as placing sandbags outside doors, airbricks and windows.

Turn off the mains supplies of water, gas and electricity and unplug electrical items and store upstairs or as high as possible. You should also move as many valuables as you can, including furniture, upstairs. Large items that can’t be moved should be weighed down with sandbags in severe floods to ensure they don’t float around and cause further damage. Move sentimental items, such as photograph albums, to a safe place as these cannot be replaced.

Remember too that your home must be in a good state of repair before the bad weather strikes or you may risk invalidating a claim. Cut back any low hanging branches that could cause damage in a storm, secure any loose tiles on your roof and clear the gutters and drainpipes of leaves and debris that could cause blockages.

And be prepared for your premium to rise next year. Unfortunately, if your home has been affected by flooding you will have to pay more for insurance in the future and you may also find it harder to change insurers, leaving you stuck with your existing insurer. And although it will continue to insure your home the cost could be exorbitant and the excess you have to pay for flood damage is expected to rise significantly.

You may decide that the price is worth paying for the peace of mind insurance gives – the cost of repairing flood damage often runs in to thousands. However, some homeowners decide to exclude floor cover from their policy. This will help bring the cost of your insurance premium down but you will obviously have to foot the bill for all repairs if your home is flooded again in the future.

What to look for from a policy
Many people will decide that flood protection is worth paying for, but what else should you be looking for when comparing insurance policies?

The key thing is to ensure you have the right level of buildings and contents insurance in place. If you are over insured you’ll be paying more on your premiums than you need to – but under-insuring could leave you out of pocket in the event you need to make a claim. Some insurers will only pay a proportion of your claim, even if it for less than the sum insured. Others may decline a claim altogether if it transpires that you are under-insured.

It is therefore vital to make a complete and honest evaluation of your contents and ensure you are including all new items such as recent gifts. Also remember that your building should be insured based on its rebuild, rather than re-sale value.

Ensure that you have new-for-old cover on all contents - this will protect the value of your items if they are stolen or damaged. Also, most insurers impose single item limits, often around £1,500, so you will need to pay extra for high value items such as jewellery or expensive electrical equipment.

Read through the terms and conditions of polices and look out for exclusions and features that are important to you. For example, do you want to cover items taken out of the home such as bicycles? Does your policy cover outbuildings and garden items? Does the policy cover high-risk items such as computer equipment, DVD players/recorders, mobile phones and money?

Of course the price of a policy will also be a deciding factor – though it can often be worth paying a little extra for more comprehensive cover. To ensure you’re getting a competitive quote you should use a home insurance comparison tool. However, there are additional ways to save cash on home insurance including:

  • Fit security devices – Ask your insurer if it can recommend a house alarm. The NACOSS standard alarm can cut premiums with some companies by 7.5%. Time-switch lights and security lighting can also earn you premium discounts and it’s a good idea to change the locks with five-lever mortise locks on doors and two-bolts on windows.

 

  • Join a Neighbourhood Watch scheme – You could save as much as 5% on a policy by participating in a scheme with your neighbours.

 

  • Reduce fire risk – Most insurers now ask if you are a smoker and will charge higher premiums due to the increased fire risk. Also consider fitting recommended smoke alarms for further savings.

 

  • Increase your voluntary excess – This is the amount you pay in the event of a claim. The higher the excess, the lower the premium – but only set it at a level you can comfortably afford.

 

  • Pay annually – You can cut out interest charges if you have the cash to pay your premiums upfront rather than monthly.

Disclaimer: Please note that any rates or deals mentioned in this article were available at the time of writing.

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