Steep rise in home insurance applications
by Gill Montia
Story link: Steep rise in home insurance applications
Applications for home insurance in the worst flooded areas of the UK have increased substantially since June.
According to moneysupermaket.com, the price comparison website, applications from the residents in Sheffield, Doncaster, Hull, the West Midlands and parts of Scotland increased by up to 300% in June, as compared with May.
Richard Mason, director of insurance at moneysupermarket.com, believes that homeowners who narrowly escaped the floods have woken up to the fact that they could have been facing bills for tens of thousands of pounds.
Whilst home insurance on typical dwellings in areas such as Doncaster, Sheffield and Edgbaston can cost as little as £101 to £117, there are reports that some insurers are considering blacklisting up to one million homes built on flood plains.
The Environment Agency estimates that 2.3 million homes are built on flood plains but 40% of property owners in the UK do not to have home insurance, which means there could be over 900,000 uninsured homes in areas with a high risk of flooding.
The evidence so far suggests that buildings and contents insurance premiums have not increased in response to the high level of claims because insurers are keen to maintain their market share.
However, insurance experts believe that if the Government does not fulfill its flood defence programme, householders in high risk areas may find it difficult to arrange cover, and premiums could increase by as much as ten times the current costs.