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Home Insurance could rise for flood plain homes as plans are made to build more

14 February 2008 / by Joy Tibbs
Despite the devastation and financial hardship caused to thousands of Britons in the past year as a result of severe flooding, the Government has proposed plans to build a million new homes on floodplains, which, according to the Association of British Insurers (ABI), could increase home insurance premiums.

The ABI believes that tighter planning controls are needed in order for home insuranceto remain widely available to those living on flood plains, and if the Government's plans become a reality then a third of its three million new homes will be in just such an area.

Speaking at the Architects’ Journal conference this week, Justin Jacobs, the ABI’s Assistant Director of Property, warned: "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.

"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."

Meanwhile, Halifax Home Insurance has found that the roofs of more than 1.5 million British homes were damaged by the 77 mile per hour winds last year, costing a total of £4.5 billion in repairs. A further £2.5 billion had to be spent repairing the damage caused to homes from water that leaked in as a result of effected roofs.

According to Halifax's research, the average cost of wind damage to homes in 2007 was £2,800 – equating to 12 per cent of the average British salary, and a massive impact upon those home owners which were not adequately insured.

Martyn Foulds, Senior Claims Manager at Halifax Home Insurance, said: "The damage caused by high winds runs into billions of pounds each year.

"Immediate action is vital if householders are to avoid seeing the problem exacerbated by water coming in through missing or broken tiles. It's advisable for homeowners to conduct a thorough inspection from ground level following high winds and call in a professional if they are concerned there may be damage."

Richard Mason, director of insurance at has expressed his concern that for those who live on floodplains "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 - £200,000 which is "unsustainable for the insurance industry to bear in the long term unless insurance premiums rise."

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