During the third quarter of 2012, the average insurance quote for both home buildings and contents cover has risen following the summer of storms and flood.
According to the latest benchmark AA British Insurance Premium Index, the cost of a buildings cover rose 2.4% to £181 over the three months to the end of September (5.2% over 12 months), while contents cover rose 1% to £242 (7.2% over 12 months).
Simon Douglas, director of AA Insurance, says that the wet summer, which according to the Association of British Insurers has cost insurers in excess of £400 million, is a sharp reminder that the industry must be prepared for more of the same over coming years.
The Environment Agency predicts that heavy rainfall will become three or four times more common over coming decades, increasing flooding tenfold. Meanwhile, the Climate Vulnerability Monitor, a report on the worldwide effects of global warming published in September, suggests that the cost of flood damage in Britain is likely to triple by 2030.
Douglas said: “I am very concerned that no agreement has yet been reached in finding an affordable option to the ‘statement of principles’ between the insurance industry and the Government, which ensures that families in flood-prone properties can continue to obtain flood cover. This expires in June next year and if no agreement is reached soon, could lead to the most vulnerable homes becoming uninsurable.
“To put this into context, insurers measure flood risk in terms of events likely to happen over a period of years. Even if a home is at risk of flooding once in a century, given that the average cost of repairing a flood-damaged property is £20,000 that is the equivalent of £200 per year, on top of the cost of covering other risks.”
Douglas added: “It’s vital that the Government and local authorities make tackling the problem at source by investing in flood defences a priority.
“It’s hard to think of a better return on investment.”