New Homes May Be Uninsurable

House buyers may find that their new home is uninsurable due to poor planning reveal industry experts. The Association of British Insurers (ABI) has warned that home insurance may increase if the government plan to build millions of new homes on floodplains goes ahead.

Justin Jacobs, assistant director of property at the ABI, said: “The Government’s ambitious housing plans are in jeopardy unless we reduce the flood risk. In the last year, 13 major developments have been given the go ahead despite Environment Agency advice on the flood risk.”

The Government tried to allay any fears. Iain Wright, Housing Minister, said that the Government had introduced the strongest planning rules ever to ensure councils properly managed the risk of flooding.

“It is up to councils to decide whether to give planning permission for new housing developments, but these rules mean they must consult with the Environment Agency before allowing new building in flood risk areas,” added Mr Wright.

Mr Jacobs believes where a local authority plans to ignore flood risk advice the Government should step in and review the proposals and be compelled to publish their decision.

“Insurers want to continue to provide flood cover but poor planning decisions will lead to more homes becoming unsaleable, uninsurable and uninhabitable,” added Mr Jacobs.

The ABI have promised to still maintain flood damage coverage for those living in vulnerable homes where the risks are being dealt with. They warn that flood cover may not be extended to the 3 million homes the Government proposes to build on a floodplain.

Floods in Gloucestershire and Yorkshire last year created damage that cost £3 billion to fix. Halifax estimated roof damage to be £4.5 billion and an additional £2.5 billion was needed to clean up leaks from the roofs.

Due to the cost of flood damage homeowners are warned about the cost of home insurance.

Richard Mason, director of insurance at moneysupermarket.com said: “We will see a hefty hike in home insurance premiums in the future because the average cost of settling a flooding home insurance claim has risen to £70,000 to £200,000 which is unsustainable for the insurance industry to bear in the long term unless insurance premiums rise.”

The average price of content insurance is £152 and buildings insurance is £209.

Most people seeking home insurance do so to protect their building and contents from theft, fire and floods. Less risk means a lower premium.

Advice to those who want to avoid flooding includes laying concrete floors with tiles on rather than timber, moving electrical points above the flood line, replacing absorbent kitchen surfaces with plastic ones and using a water-resistant type of plastering.

Mr Mason said: “Home owners whose properties are at risk must have good quality home insurance. Doing so ensures they will continue to be covered regardless of what happens in the future.

“My advice is to have a policy with a well-known insurer such as Norwich Union or Halifax.”

He also advised checking the Environment Agency’s flood map when looking for a home.