Home insurance 'needs overhaul' as flood costs keep rising
As flood costs keep rising there may need to be more thought about home insurance.
It has been claimed that the recent flooding experiences in the UK highlight the need for more thinking about home insurance.
The recent heavy rain that resulted in serious floods damaging large parts of the country, particularly in cities such as Bradford and Leeds, has left a trail of destruction in its wake and significant problems for many homeowners that are struggling to know how they are going to cover the costs of the disaster. Home insurance premiums are also likely to increase substantially for victims once their properties have been put back in order, because of the risk that they face from further flooding in the future.
And as such, one expert has suggested that something needs to be done to tackle the problem and reduce the burden facing homeowners when their property is hit by flooding. As climate change continues to wreak havoc with British weather, it is anticipated that flooding will become a major problem on a regular basis for large parts of the country and therefore insurance firms are being urged to change their approach to the sector in order to deal with the problem. On current assessments, there is the threat that large sections of the country are going to become completely uninsurable, something that will not only be bad for homeowners and companies, but will also result in the insurance industry effectively doing itself out of a significant amount of business.
Andrew Perryman, a sales director at specialist insurance website, Best Deal Insurance, has called on the industry and the government to act on the problem and begin to make the changes necessary to tackle the problems of flooding.
Mr Perryman told Mortgage Introducer that there are a number of problems at present, the first being that many people do not bother to insure their home. "Despite the general consensus that buildings insurance is compulsory, there is no legislation nor any processes in place to check that a homeowner actually has cover," he explained.
Therefore, Mr Perryman suggested that the government needs to act to make it more recognised among homeowners that buildings insurance is a compulsory part of their owning a property.
Another area in which the government can help to beat the floods is by establishing stronger flood defence systems. This would mean that properties that have been recently hit by the flooding would have defences in place to make their homes far less of a risk. This would mean that the cost of their home insurance and buildings insurance would be greatly reduced because the risk would be assessed as being much lower.