Sky Insurance

Buying your house in a flood plain can be a bit a problem when it comes to insurance. For many years people have bought houses within a flood plain area. This has not made a difference in the past as many years have past by with no problems. However the floods of summer 2007 in the UK caught a lot of people unaware. It was estimated that it cost the UK insurers in the region of £3 billion to cover all of the losses. The problem now comes when people come to renew their home insurance.

There should be no problem with the existing company that you are with, as the ABI has agreed that their members will still carry on insuring their existing clients providing the government puts more money into new and improved flood defenses. The trouble is they can easily increase the premiums and when you go to shop around for another quote you will probably find that either other companies do not want to insure the house, or that the premiums will be a whole lot higher than someone who does not have a property in a flood plain area.

The insurance companies are getting a bit twitchy as there are over 2 million homes in the UK which are in an area at risk from coastal or inland flooding. It appears that is 10% of the homes in the UK. Also around 400,000 homes are in a very high risk area which equals to 1 in 75 chance of flooding. So what can be done? Well if you already own a property within a flood plain area then you may have to live with the high premiums. When selling your house, the new owners will probably have to use your own insurance company to carry on with cover.

If you are thinking of buying a new house then it is better to try and not buy one in a flood plain area. This can be checked by making sure a detailed survey is done before the purchase. Also some checking can be done yourself by looking at the Environment Agency's website where you can find if the property lies within the proximity of the flood plain area or not. For long term investment this is the best solution.