ASK THE LETTINGS EXPERT Sharon Canning Move On Rentals
Insurance may not cover properties in flood risk areas! Over the winter we have seen unprecedented floods all over the country. What many people may not be aware is the Government has reached a deal with insurers to replace the ‘Statement of principles’ (which ran out in July 2013) with a new scheme call ‘Flood Re’ due to commence in the summer of 2015. Statement of principles was originally set up for insurers to offer affordable flood coverage to the vast majority of households in return for the Government maintaining its spending of flood defences, which was felt to be untenable. The replacement scheme ‘Flood Re’ will leave millions of homes without access to affordable flood insurance. The exclusions are: • Leasehold properties; • The entire private rented sector (including holiday lets, HMO’s) • Small and medium-sized business (SMEs); • Housing association homes; • New-build homes constructed after January 2009; • Council homes; and • Properties in council tax band H.
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With almost 5 million leasehold properties thought to be in England and Wales, and over 4 million homes in the private rented sector, this means that many millions of properties are likely to be excluded, rather than the widely-cited estimate of 9,000 homes. The Association of British Insurers (ABI) claimed that, “Flood Re will cover domestic properties, regardless of whether leasehold or freehold”. Official census data shows that there are 3,137,000 homes in the private leasehold sector, and 773,000 leasehold conversions in former houses, which are likely to be in small blocks run by leaseholders and may not have the muscle to obtain affordable flood cover if they are in flood-prone areas. Ian Fletcher, Director of Policy at the British Property Federation, said: “…People who live in leasehold properties will be able to insure their contents, but that will be cold comfort to them if they cannot afford to repair the structure of their home, replace their kitchen or mend their pipes and electricity cables.” The new policy states you must be a home owner and it is your main residence. The Association of British Insurers (ABI) have released a questions and answers on their website www.abi.org.uk if you require further information.
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If you are a landlord and would like advice then please contact Sharon@moveonrentals.com or telephone the office on 01202 711169. 89
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