Unsalable, uninsurable, uninhabitable

Last summer wasn’t a great one for insurers. Widespread floods in Yorkshire, Gloucestershire and Worcestershire walloped the industry with more than £3 billion worth of claims and so far insurers have paid out £1 billion of that. The shock of payments has led insurers to warn that stricter planning controls will have to be introduced, otherwise many homes run the risk of being uninsurable.

Fears about global warming and freak weather have clearly piled worry on insurance companies, especially after the Association of British Insurers (ABI) said that a third of the three million new homes the government wants to see by 2020 will be built on flood plains. In some cases, local councils are granting planning permission to developments on flood plains, despite the Environment Agency warnings about this in the past year.

13 such developments have been given the go ahead, according to the ABI, while seven of the sites are deemed to be at high risk from flooding. Justin Jacobs, the ABI’s assistant director of property, stated, ‘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 unsalable, uninsurable and uninhabitable.’

It’s a worrying development for the UK housing industry which is now beginning to slow down after a housing shortage and record prices. New homeowners will have to make doubly sure that their property is insurable over the coming years, especially if it is close to a water source. If you’re looking for home insurance, then ASDA Finance is a good place to start your search.

Only around a half of the 15,000 households that were in temporary accommodation have been able to return to their homes since last summer, and insurers will be keeping their fingers crossed for a dry season this time around.