With the high level of rain we have had over the last six months the time has now come for homeowners to dust off their “House Stuff” folder and check that their home insurance adequately protects them against flooding. There are 3 main components to each policy and it is advisable that you are covered sufficiently in each:
- Building coverage – this pays to repair or replace the building and its electrical, plumbing systems, water heaters, refrigerators and other built-in items
- Contents coverage – this provides payment for the contents of your home such as clothing, electronic equipment, and larger removal items such as washer dryers (although check your policy as these could be included as part of the building coverage)
- Replacement cost – This is the valuation method for establishing the valuation of the property for determining the amount the insurer will pay in the event of a loss. It is typically defined as the cost to replace the damaged property with materials of like kind and quality, without any deduction for depreciation.
It is also advisable to ensure that the budget allocated under your policy adequately covers the cost of renting a property should you need to be re-housed. Useful questions to ask in this instance are:
- Does the policy include a budget for temporary furnishing for the rental property
- Does the policy cover the estate agent’s costs in setting up the tenancy agreement?
- Who will pay the deposit for the rental property – the insurer or you?
- Does the policy allow for a property to be rented near the damaged property and is this affordable? While renovation works are being undertaken you will need to monitor the progress of contractors which will be a lot easier if you’re living close by.
If you find yourself in the unfortunate position of having been flooded, contact your insurers immediately and take your lead from them. Most will have 24-hour emergency helplines which can provide advice on the next steps. If alternative accommodation is required remember that time is not on your side so it is advisable to rent through a reputable ARLA licensed agent where you can be assured of appropriate paperwork, proper handling of the finances and accurate advice.
It is important to obtain independent advice from an insurer/broker who will lead you through the murky waters of flood insurance so that you can obtain a policy that best suits your needs and risks and provides you with the best coverage and value for money.
If you wish to find out more information about flood insurance please contact the residential property department and they will be able to put you in touch with an insurance expert.