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The Jubilee River story (0946) - Flood insurance issues - examples

The agreement between the Government and the ABI runs out in June 2013.

Below are three examples kindly supplied by Dr Barrie Mair

Case 1.

Dr Dennis Lockhart (DL) of Croome Cottage, Fishery Road, SL6 1UP

(Note: Dr Lockhart has given permission to give the personal details behind the case..........)

For the past 9 years DL has been insured with Insure4retirement, a company within the Insurance Dialogue limited group.

Insure4Retirement.co.uk is an independent intermediary specialising in insurance for people aged 50 and over. Insure4Retirement is a trading name of Insurance Dialogue Ltd. Authorised and regulated by the Financial Services Authority. Firm Ref. 307941.”

His previous year’s combined house and contents premium was £550, which he was notified was to be increased to £693.65 upon renewal. Furthermore they had attached conditions which had not seen on previous renewals:

1.      No subsidence to any properties within 100 metres of Croome Cottage

2.      No flooding to houses within 100 metres

3.      No river within 100 metres

To his knowledge:

1.      The property had not been flooded in terms of his occupancy, but probably was in the 1947 floods in the area

2.      During his occupancy, the next door but one house had suffered from internal flood damage in recent years, and my house opposite had been “moated” – i.e. surrounded by water, with water in the underfloor void, but no water above floor level.

3.      The river Thames flows at the bottom of his garden which is no more than 25 metres away from the house.

Consequently he decided to apply online via Confused.Com. Their response indicated that a total of 82 companies had been approached but that only 1 – Homeprotect from AXA were prepared to quote.

Interestingly, their quote, which he accepted came to only £499.08, which was lower than the previous premium that he was paying.

 

Case 2.

Dr Barrie Mair, Wych Elm, Fishery Road, SL6 1UP

Background:

Shortly after purchasing my property in 1975, when I was insured by Legal & General, my 1892 build house showed signs of subsidence. Because of its hitherto unaffected history, we assumed it was due to weighted pile-driving on houses being developed in the adjacent orchard. This caused a major crack in the very deep-set foundations, because of an underlying layer of peat that had dried out during unusually dry summers of 75/76. Following a major piling/ground beam repair job, that was ultimately completed in 1981, Legal & General accepted the engineers completion report and accepted reinsurance at a significantly higher premium. This was put out to the market comparison, and as a result I switched to Boncaster, who I have been with ever since.

Recent history:

On 8th December 2011, my wife and went to visit our daughter in South for a 30 day holiday. Whilst we were away (dated the 11th), Boncaster sent out a reminder of renewal on the 31st January, followed up by a final reminder, both of which arrived whilst we were away. Upon our return on the 8th January, I realised that the insurance had technically lapsed due to our absence. I immediately contacted Boncaster who:

a)      Refused to renew at the premium quoted

b)      Asked me to go through the full re-application declaration which asked whether previously subsidence had occurred, were we less than 100 metres from the river etc. The upshot of my new information was that they would not re-insure the house at all.

After many arguments and discussions, and with advice from a local insurance agent , I went directly to Boncaster’s new underwriter (Red Star), and explained the situation from an 8-day over-run in my premium payment date. Fortunately I had retained all the historical records of the engineer’s reports, and Legal & General’s acceptance of re-insurance after the subsidence work had been completed. Eventually they (Red Star) agreed to re-instate the insurance cover, but with the flood excess premium increased to £2,500 (a £1500 increase).

Possible Mitigation Actions:

Because of the permeable nature of the sub-floor ground concrete layer, a decision was taken not to install air-brick covers etc, as their effect would be minimal. The swimming pool, which flooded, gains no benefit from bund-wall/sand bags as the ground water rises and causes the pool liner to lift, causing further damage.

 

Case 3.

Councillor Geoff Hill lives in Chandlers Quay (North of Maidenhead Bridge on the Cookham Road). The basement area of the flats was flooded in recent years and, as a result, they have taken flood mitigation action. The primary activity was to stop the lift for the flats from going down to basement level, thus protecting the workings, and passengers from being immersed. This reduced the increase in insurance premium being asked for.