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Wednesday, January 25, 2012

New Rules on Flood Insurance

According to SearchFlow, a property information firm, billions of pounds worth of property is at risk of being left un-insured as the rules on flood insurance change.

Currently, the government’s “statement of principles” agreement means that up until June 30th 2013 insurance providers must continue to cover properties that are at risk of flooding, but even so, from June onwards this year, it is expected that many insurers will be severely raising their premiums for flood risk properties or just completely refusing to cover those types of property.

This is expected to have huge ramifications for not just homeowners but also business owners with a premises at risk of flooding and also commercial property owners who may find that their landlords insurance renewals do not cover flood damage anymore.

When asked about the situation, Richard Hinton, Business Development Director at SearchFlow, said “Although buyers will be able to obtain flood insurance for the next few months, the long-term prospects of properties at risk of flooding are potentially bleak.”

He went onto say that the situation was especially bad news “for buyers purchasing in high-risk flood areas, the possibility of very high premiums, significant reductions in value, less access to mortgage finance – even action taken by the mortgage lender due to breach of the mortgage agreement – is high.”
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