Tuesday, January 08, 2008

Disadvantages Of Living In A Flood Risk Area

By John Paige

When you build or purchase a home in a flood zone area, you are accepting with it a number of consequences. Floods can come at any time, with little to no warning, and you must always be prepared for one. The other downside to living in one of these areas is that you will pay a higher flood zone insurance premium.

Insurance companies are becoming hesitant to give insurance policies to houses located on flood risk areas because it can not have escaped every one's attention that parts of the United Kingdom were severely devastated by floods in 2006 and 2007. This will affect insurance providers too because if everybody suddenly files for a flood insurance claim, either they will have to raise all the insurance premiums or they will close shop before the year ends.

Facing these facts, flood insurance providers have started asking the government to spend more time and money protecting and defending the areas hit in the recent floods, particularly those areas hit the hardest. Most standard UK insurance policies do not include flood coverage, which is why it is so very crucial to purchase a flood insurance policy as soon as you can to cover your home and possessions.

Faced with millions of pounds worth of flood damage insurance claims due to the recent severe flooding in the UK, do not be surprised if your insurance provider will refuse to renew your current policy when it expires. This is particularly true if you have been a victim of the floods or your house is located in the flood zone.

Unfortunately, insurance companies are not forced to offer you a policy. Much like all other businesses, their primary objective must be to generate revenue, and if you pose a risk to their company, they may not be able to accept you, or to renew your coverage if you currently hold a policy.

If you are lucky enough to be offered renewal of your policy and you live in or near an area hit by the recent flooding, do not be surprised if you are expected to pay a much higher premium. This is an unfortunate consequence to living in a high risk area. Even if you are able to obtain the coverage that you desire and need, competitors will not be waiting to offer you low, bargain prices.

If you have fallen victim to the recent floods, and have suffered the loss of your possessions and even possibly your home, trying to get a policy right now may not be your best option. With insurance companies still bouncing back from the blow of the massive floods claims that have poured in from the last two years, your chances of getting a policy are at an all time low.

Sadly, there is also the very realistic possibility that many of the existing insurance companies within the UK will remove flood coverage from the list of things covered under their standard insurance policies. This is very likely if the government does not step in and focus more of their time and budget on flood defense. If these coverages are dropped and the government does not take a stand, the residents of these high risk areas are bound to suffer even more than they already have.

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