Flooding: One year on. Can you get home insurance?

A year on from the flooding which devastated many homes and businesses, the government and the insurance industry have come to an agreement on how to tackle the risk of future flooding.

But in reality, is it still possible for those who had to claim for flooding on their buildings insurance last year to find a new insurer who will cover them?

The insurance industry, which paid out around £3 billion in claims, has argued that it could not afford to insure people living in flood-prone areas unless the government invested money in improving flood defences and drainage to reduce the risk.

The prospect of millions of homeowners unable to afford the high premiums, or completely uninsured, was a worrying one especially with flood alerts in the south-west at the beginning of July.

Home insurance is important, not only to protect homeowners from losing their house, but is essential to secure a mortgage.

In good news for consumers, an agreement between the government and the Association of British Insurers, which represents 94 per cent of UK insurers, has secured protection for flood-prone homes and businesses.

Insurers will continue to insure their existing customers who are at significant risk and insure new and existing customers who have a one in 75 annual risk of flooding, provided the government invests in defences, tightens planning rules and raise awareness of what householders can do.

ABI director general Stephen Haddrill says the agreement "will help ensure that the flood insurance protection, relied upon by millions of householders and businesses, remains widely available".

Although clearly good news for many, the agreement stops short of guaranteeing everyone insurance, particularly those at high risk. As the household budget becomes increasingly stretched with higher energy and food bills, is it still possible for those in risky areas to secure affordable insurance – or any at all?

Moneysupermarket.com has researched the question and has come up with optimistic findings.

Comparing premiums from June 2007 to June 2008 for Tewkesbury – one of the worst-affected areas – the comparison website found many insurers are still willing to offer cover, albeit at higher prices.

All ten insurers still offered cover for households in this area, provided they had not made a claim last year. Some premiums had even dropped, with the cheapest offering a policy for £22 less than last summer.

The story was very different for those who had claimed, however. Only three insurers - Halifax, Birmingham Midshires and Sainsburys – returned quotes.

Although this means those who have claimed on their home insurance before will have a limited choice, the premiums are still competitive with quotes on average only £8.61, or five per cent, more expensive than the previous year.

The British Insurance Broker's Association (Biba) says that even with the agreement between the government and insurers in place, some homeowners will still struggle to get cover.

Eric Galbraith, BIBA chief executive, says: "It is clear that there will remain a number of properties unable to obtain cover from this new agreement, particularly where there are no plans in place for local flood defences.

"These are the properties which will be most affected and it will be important that these customers are aware that cover can be obtained through a Biba broker."

The group suggests those who are finding it difficult to find cover should visit an independent insurance broker who has an expert knowledge of the home insurance market.

A Gocompare.com spokesperson agrees. "If homeowners have been affected by flooding in the past, it will be extremely difficult to get cover online as many insurers will not provide an online quote for those previously affected by flooding.

"However, if you cannot get a quote online, you will often be referred to an offline specialist who may be able to provide you with a quote over the phone," the company advises.

If you are finding it difficult to get insurance, there are steps you can take to improve your prospects, according to comparison website insurancewide.com.

James Harrison, chief executive of insurancewide says: "What many homeowners don't realise is that 90 per cent of the damage associated with flooding is actually caused by the first inch of water to enter the property.

"Therefore, it is highly recommended that you invest a few hundred pounds in the necessary protection. One piece of kit which will help you achieve a good level of protection is offered by Flood Guards (www.floodguards.com).

"Their equipment reduces the prospect of water getting through your door and window sills and improves you as an insurable prospect in the eyes of the insurance industry. Once you have taken such measures to reduce the risk, you will have put yourself in a better position to approach a flood insurance specialist."

Being flooded means higher insurance costs, but home insurance is still available. Shop around and tell your insurance company what you are doing to protect your home.

Sarah Routledge