Test the waters and ask the right questions over flood risks
of a flood damage insurance claim will affect the ability to obtain buildings insurance cover on normal terms and at competitive premiums. This will affect the value and saleability of the subject property thus affecting the current home owner whether or not they are looking to sell their property.
To add to the current problem, as from July 1, 2012 the building insurance industry’s Statement of Principles, which is essentially a gentleman’s agreement between the Association of British Insurers (ABI) and the government, comes to an end.
This agreement places an obligation on the insurance industry to provide buildings insurance cover for properties at risk of flooding. The government has yet to announce a future proposal.
Accordingly, obtaining buildings insurance cover over properties susceptible to flooding may be at a costly premium and, in some cases, cover may not be available at all. Thus you are wise to be wary of this potential problem.
In respect of the property you are looking to buy, if it is at risk of flooding and consequently expensive insurance premiums, high excess obligations or the non ability to insure, they are all relevant issues.
Your conveyancer should include within their pre-contract enquiries of the sellerm questions directly relating to flooding, for example :
Has the seller any knowledge of the flooding history surrounding the property?
Have the property and grounds ever suffered from any form of flooding, no matter how slight, during their ownership?
Can the seller confirm the property is insured on normal terms and at normal high street premium rates?
Can the seller confirm if any claims have been made on their buildings insurance during their ownership?
Confirm the date, nature and value of each and any claim.
Instruct your conveyancer to carry out a flood search, widely available online to conveyancers. A flood search is not a standard search and as such you should make a specific request for this search to be obtained. The result of it should be referred to your surveyor for their comment and approval. Further information is available via the Environment Agency’s website and also at – www.knowyourfloodrisk.co.uk.
I would also advocate meeting with your potential new neighbours and asking them if they know of any local flooding issues in the area. This style of enquiry usually produces some interesting and informative results from non connected persons who may disclose relevant local information.
Due to the changing climate we are now experiencing, even if the searches, investigations and survey do not reveal a flooding history or problem, this does not mean the property may not be at risk.