Flood Insurance Guide

Part One - Protecting Your Home

Part One - Protecting Your Home

If your home is located in a high flood risk area then not only will you want to have home insurance cover but you will also want to ensure that you have the right cover in place. Buying home insurance can be confusing so here at Flood Assist we've produced a guide to help.
Part 1 of our Flood Insurance Guide help's you understand the typical types of insurance cover that you can buy to protect your home and how much cover you actually need.

Insurance cover for your home

Will my insurance automatically cover me for flooding?

Flood cover is something that is typically included in all home insurance policies. However, if your property is in a high flood risk area or has previously been flooded then it's best to check that you are definitely covered for flooding.

If your policy is included in the Flood Re scheme you will be covered for flooding. If your property is not eligible for Flood Re and is in a very high flood risk area you may have flood cover excluded from your policy. This however should be brought to your attention when you take your insurance policy out.
What type of home insurance policy do I need?

When buying insurance for your home you should consider what you need or want to protect. There is no legal requirement to insure your home however it is likely to be your largest financial asset and as such you should consider protecting it.

There are 2 main types of insurance policy that you can purchase to protect your home and its contents:
1. Buildings insurance

This is insurance for the building itself. If you have a mortgage on your home, it will be a condition of your mortgage that you insure your home, including for flooding.

Your policy wording will contain a definition of what your insurer includes as a building, this can be found in your policy wording. Typically, buildings are defined as: your actual home, its fixtures and fittings, garden walls, gates, paths, patio's, driveways, oil/gas tanks, tennis courts, decking, patio's garages, outbuildings, sheds, greenhouses, summerhouses. Each insurers definition of buildings varies so It's important that you check your policy wording so that you know what is and what is not included.
2. Contents insurance

This is insurance for the contents of your home. The simplest way to think about contents is it being the items that you can remove from your home; if you were moving house it would be the items that you would take with you when you move.

As with buildings insurance your policy wording will contain a definition of contents. Contents typically includes items such as: household goods, personal effects, frozen foods, valuables, money and business equipment. Contents insurance will only cover items that either you of your family own or are legally responsible for.
Each insurers definition of contents varies so it's important that you check your policy wording so you know what is and what is not included
Some insurers or brokers may offer what they call a combined home insurance policy, this is a policy that cover buildings and contents under one policy.
New for old or Indemnity cover - what should I buy?
The type of cover you buy will determine how your insurer will settle any claim that you make.
  • New for old cover - your insurer will either pay you for the full cost of repairing damaged items, or replacing them with equivalent new items if they're stolen or damaged beyond repair. This is the most common type of cover and way insurers settle claims.
  • Indemnity cover - your insurer will make a deduction for depreciation, wear and tear when they pay your claim. For example: if you're your home floods and your sofa needs to be replaced at a cost of £500, your insurer will only pay you what your old sofa would currently have been worth. An indemnity based policy may well be cheaper to buy but it can leave you out of pocket if you make a claim.
How much should I insure my home for?
Insuring your buildings

When calculating out how much cover you need for your buildings it's important to remember that you need to insurer your property for the cost of rebuilding your home and not its market value or the price someone would pay if they bought your home as this would include the value of the land your home is on as well.

If you are unsure of what your home will cost to rebuild, there are many online guides available to help you calculate this. The Association of British Insurers offers a guide on their website: https://abi.bcis.co.uk/
If you have recently purchased your home and had a survey completed on your property your survey will include a rebuild cost.
If you have recently extended your home make sure you also increase your buildings sum insured to take this in to account.
Insuring your contents

When calculating how much cover you need for the contents of your home the amount of cover you need should be for the total value of all your items. It may help to think about this as the value of the items you would take with you if you moved house including your carpets and curtains or what you would have to replace all your items if your home was completely gutted by a fire. Don't forget to include items in outbuildings, garden offices, sheds and garages in your estimates too.

As well as asking you for the total value of your contents your insurer will also ask you to confirm additional amounts of cover for the following:
a. Specified items (Items that exceed a certain amount)
All contents insurance policies include a maximum amount you can claim for a single item. If you have one or more items that exceed this amount then you will need to have these items individually insured and listed in your insurance policy. For example, if your policy has a single item limit of £1,500 and you have a diamond ring valued at £2,000 and you want to insure the ring then you need to tell your insurance provider to include this in in your insurance policy.
b. High-value/risk items
Your insurance provider should ask you what cover you would need for high risk items. These are items that could easily be stolen from your home such as antiques, laptops, jewelry, watches, TV's and artwork. The amount of cover you need is the total value of all your high-risk items. You do not need to include items that you have insured as specified items in this amount as they will already be covered.
c. Personal possessions
Contents insurance covers you for items that are usually keep at your home it doesn't cover your items when they are not at your home that may become lost, damaged or stolen. If you want cover for items when you are away from your home then you will need to include Personal Possessions cover in your household insurance policy. Typical example of items that you may want to insurer away from your home are: laptops, cameras and jewellery.
Personal Possessions covers your whole family that live at the insured address so to work out how much cover you need you must add up the total value of all the items that you and your family may take outside the home at any one time. The amount you cover your personal possessions for should be also included in your overall contents sum insured as these items will also need insuring when they are at your home as well.
Personal possessions cover will cover you in the location(s) stated in in your policy wording (often referred to as your territorial limits). This is generally either Europe or Worldwide, check your policy wording as insurers will list what countries they will offer cover in.
Your policy will also include a time limit that your insurer will cover your personal posessions for, generally this is set at a maximum number of days in any one year, typically either 30 or 60 days, again check your policy wording as cover does vary.
Part Two of our insurance guide focuses on the cover your insurance policy provides you with, focusing on what cover features, conditions and exclusions people living in high flood risk areas should be aware of
If you have a question about insurance that you'd like to know the answer too, email at info@floodassist.co.uk

Flood Insurance Guide