Insurance advice provided by Equity & General Insurance Services Ltd.
Equity & General Insurance Services Ltd is authorised and regulated by the Financial Services Authority.
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Flood risk in the UK
For many people, flooding is a fact of life. There are more than 2 million homes at risk from coastal or inland flooding (10 % of total homes in the UK), and around 400,000 homes at very high risk of flooding (greater than 1.3 % annual probability or 1-in-75 chance).

The UK is unique in offering flood cover as a standard feature of household insurance policies.  Unlike much of Europe and worldwide, cover for home insurance in flood risk areas is widely available to the UK’s 23.5 million householders. 

In the long term, this situation could worsen, unless we take action to reduce flood risk to people and property. Climate change will increase winter rainfall, the frequency of heavy rainfall, and sea levels and storm surge heights. With no change in Government policies or spending, climate change could increase the number of properties at risk of flooding to 3.5 million. Furthermore, continued pressure on land could mean even more new developments being situated in floodplains making house insurance more expensive due to the increased flood risk.

Flood insurance in the UK
By spreading risk across policy-holders, insurance enables householders and businesses to minimize the financial cost of damage from flooding. In the modern competitive insurance market, premiums reflect the risks that customers face. This enables insurance to be offered at very competitive prices to customers living in low flood risk areas.

After the widespread flooding in Autumn 2000, when around 10,000 properties were flooded and the costs to the insurance industry exceeded £1 billion, the ABI worked closely with the Government to agree terms through which the industry would continue to provide flood risk cover for the vast majority of households in the country. Further details can be found in the ABI report Renewing the Partnership.

In 2005, ABI published an assessment of progress on flood management on the fifth anniversary of the Autumn 2000 floods. See press notice for further details.

Source Association of British Insurers

More information on how the likelihood of flood in your area affects your home insurance.

In 2003, the ABI and their member companies, agreed to continue offering home insurance for properties and businesses located in many of the UK's flood risk areas. The Environment Agency is working with the Association of British Insurers (ABI) to support the insurance industry's commitment to continue offering flood risk insurance to the vast majority of homes and businesses in flood risk areas.

While the Environment Agency has no role in determining insurance cover, they do share a common goal with the ABI to improve flood mapping and provide the best available information to the public.

To assist householders and insurers in providing insurance, The Environment Agency have supplied ABI member insurance companies with information that gives a national assessment of likelihood of flooding, from rivers and the sea, within the floodplain taking into account flood defenses. It provides a first step for insurers in assessing insurance and providing house insurance in flood risk areas. To get a better understanding of the flood risk attached to a particular home, insurance companies refer to a flood map that was originally devised by the Environment Agency.

SUBSIDENCE /UNDERPINNED PROPERTIES

The housing market is in a very complex position although values are rising its still a buyers market   Something that can greatly affect the chances of selling your house and can be quite common! Is if it has ever faced issues over subsidence or landslip caused usually by poor soil such as London clay or mining area or perhaps just badly laid foundations such as a property that has been extended or even has bay windows fitted  without adequate building control so for example, one of 2 things can happen either the extension has weak foundations so the extra weight of the extension makes the house subside or that the foundation of the house were not strengthened so the weight of the extension affects the house.

Also in times of poor weather or dry spells tree roots can either weaken the foundations or break drain pipes so the house will fall over. This is easily repaired with underpinning.

Not forgetting older houses that can settle with age producing cracks. Often fixed with stay bars through the property those metal X’s or circular plates on the side of older houses are in fact a huge nut and bolt working like a corset.

One of the most ridiculous scenarios that can occur is problems with garages that are often on a separate piece of land away from the home often these were jerry built on spare land without foundations and they do subside but if this happens you may be able to get insurance.

The mainstream insurers take a very panicky approach as soon as you mention any subsidence or cracking even if you are not thinking of selling you make struggle getting cover please remember even if you don’t think you have been asked you must notify the insurer otherwise any claim will be rejected as insurers do share claims information.

It is best that seek an insurance broker who understands the complexities of this type of property especially one that does not demand additional and costly survey reports and can turnaround quotations within day or less Don’t panic you will be pleasantly surprised to find that specialist cover should not be expensive.

In an ideal world if you already have cover in force on an underpinned property it should be a straight.

Process to pass this to the buyer sadly this does not happen so the sale falls through  a true specialist can pick up the pieces at the last possible moment offer a sensible premium that automatically passes to any future buyer  no one else can make that promise It is very very unethical for insurers not to do so but sadly insurance has become blighted by the “COMPUTER SAYS NO” mentality.

EX OFFENDERS INSURANCE POLICIES
HOW INSURANCE COVER AFFECTS THE SOCIALLY EXCLUDED AND THE UK ECONOMY THE ISSUE

There are still major insurance issues faced by an estimated, eight million UK, and Northern Ireland residents who have a current unspent criminal conviction that may stop them starting either a business or going about their every lives thus contributing to society.

Similar issues are faced by bankrupts and those with adverse credit history.

Mainstream Insurers are either refusing them Insurance or restricting cover including Employers Liability which is a requirement by Law.

For those venturing out with a new enterprise, or still trying to get the correct cover including Public Liability cover, as well as cover for the business assets.

Many would be clients of insurers maybe unsure or unaware that there is a DUTY OF THE POLICYHOLDER TO DISCLOSE MATERIAL FACTS THAT COULD AFFECT THE POLICY.

For example a MATERIAL FACT that must be disclosed relates to criminal convictions.

With Insurance becoming an automated process either being bought via the internet or at call centres manned by staff that may not have vast experience the important issues of disclosing material facts is often never pointed out.

The fact that the Internet type policies are offered at perhaps slightly unrealistically low rates without checking on convictions etc is also affecting the Insurance Premium Tax revenue as well.

It is muted that insurers may be taking on risks that will be invalidated when claims occur and the conviction is brought to light.

Perhaps this is an explanation as to how those insurers can cut the premiums is that there are a substantial number of the total policies sold that will not pay out in the event of a claim as they can just be invalided due to the conviction. Figures from the Financial Ombudsman Service are indicating a greater number of complaints of this nature.

This matter has been raised with insurance industry via the Financial Services Authority, the British Insurance Brokers Association and the Association of British Insurers But no real action is being taken to solve the problem OF NOT TREATING POLICYHOLDERS FAIRLY.

It has been proven by a number of ex offender organisations that this issue is in fact a reality, either the main stream insurers go out of there way to hide the fact that convictions are to be disclosed or when the policyholder does disclosure they are refused cover or given a poor service.

CASE STUDIES/EXAMPLES

Q What are the problems faced by ex offenders looking for insurance?

Many ex offenders are unaware that they must disclose any unspent criminal conviction no matter how minor on an insurance proposal form. Do not be fooled, just because an insurer does not ask if you have any convictions, does not mean you do not need to disclose them. Unless all your convictions are declared and agreed in writing with an insurer, any claim against the policy may be refused. You could even be charged with attempting to defraud the insurers for non-disclosure of a conviction and potentially face another conviction.

Anyone who has, or lives with anyone who has, any unspent conviction should always read insurance policies carefully. Be on the lookout for the phrase “DO YOU OR ANY MEMBER OF THE FAMILY HAVE UNSPENT CRIMINAL CONVICTIONS?” Remember it is when you come to make a claim that things can go very wrong.

When insurance cover is cancelled for non-disclosure of a conviction you will be unable to make a claim on the policy.

Q Why do ex-offenders face issues with insurance?

It has long been considered that someone with a conviction is a bad risk, although this attitude has never been proved. It just seems to be an unwritten rule in insurance. A more enlightened approach to insurance not only for ex offenders but also individuals with adverse credit has been hard to find. Mainstream comparison websites have offered little or no assistance in this area.

Q What can ex offenders do to help reduce their insurance premium?

Firstly do not waste money buying a worthless policy without disclosure! Be honest disclosing convictions to the right insurance broker should not cause a problem. Correct disclosure does not always mean increased insurance premiums but it defiantly means you are insured.

Q What do you think the future holds for ex offenders facing insurance issues?

The Financial Services Authority has been aware of the bad practice of unfairly treating ex offenders and other socially or financially excluded groups. Current figures suggest there are 8 million people in the UK with unspent criminal convictions, which consequently affects other family members.

CURRENT PRACTISES AND THE FAULTS

Due to these insurers relying on high volume sales they have adopted, rather than the traditional policy method of issuing a comprehensive proposal form for the policyholder to complete they use what is referred to as assumptions. A standard statement set that the policyholder should read and understand prior to purchasing the policy. Within this assumption there are words similar to “Neither you nor any member have an unspent criminal conviction” as well as other facts that will affect the validity of the policy.

The problem this causes is that it compounds the confusion of the policyholder as rather than making clear from the outset that the insurer will not or cannot accept risks where a Criminal or bankruptcy situation is disclosed it is done at final point of sale. Also at that late stage a point the policyholder cannot understand.

A better practice will be making it compulsory with all online/telesales insurance purchased that the “standard statement” is highlighted before the purchase even begins and when the policyholder confirms they do not comply the quote process ceases and they should be re directed to a specialist provider who will cater for them after full disclosure.

There was a working party group formed by the consortium of online insurance aggregators and insurers who had this matter on their agenda after regulatory pressure. The group did not last very long and in fact did not ever actively function.

Private sector/ Government departmental misconception Those organisations working with ex offenders cannot or do not understand the issue actually exists as it is not part of their operating remit or practice .Public misconception. The public in truth only have a vague understanding of the insurance process ridded with hearsay and miss conception/ urban myths so a great need of re education is needed about DISCLOSURE OF MATERIAL FACTS, also that it is possible to obtain insurance with criminal convictions and that importantly when dealt with by specialist providers who are socially aware and are truly ethical.

Also that in truth it should cost the same premium with disclosure as it does without the public fear is that if they do disclose the premium will become un affordable which is in fact should not be the case.

SOLUTION IN CONCLUSION

The mainstream insurers must be forced to act fairly with clients and cease using public lack of awareness or ignorance as means to sell them worthless cover and be more forthright about the risks they can accept and those they cannot IE ensuring the “standard statement” precludes any cover purchase and that they work with specialist providers who can.

There is also a huge need for organisations working with ex offenders to understand the issue so that the correct guidance is given at point of prosecution & rehabilitation.