landlord insurance - flood risk issue

eastmidsaver

hi , i am posting this on behalf of somebody else.
he has a property which he has been renting out for many years,  but last few years its getting harder and harder to find quotes.
the reason he has been told is because it is allegedly in a high flood risk area.
the renewal quote he has had this year has gone up, and the lady on the phone told him its because the property has now been moved into a higher flood risk band. on top of this, the flood excess is now £10,000 which seems crazy.
i have looked online, and it seems this is a common issue with landlords. he hasn't looked on comparison sites yet, but i am just wondering if anyone has experience with this issue, and if so, are there ways around this?
for example, can you buy separate policies for flooding?  (please recommend if so). 
or any other ideas?
thanks.

Sandtree

Not sure there are any comparison sites/aggregators that really compare landlords insurance... Confused.com, CompareTheMarket and Money Supermarket are all just the broker Simply Business showing their panel in a comparison site style list. 

The problem is that Landlord insurance is a type of business insurance and as such doesn't have option for the insurer to buy protection from Flood Re which only covers private homes.

Anything can be bought, as long as its not illegal (or encourages illegality - eg drink driving insurance) but go from mass market products to bespoke and you pay the fact that humans are spending time doing analysis, writing terms etc -v- a computer doing hundreds a minute. Its not normal in the small landlord insurance space to split property and property flood from each other.

jimbo6977

Has he checked the Environment Agency website? 

https://flood-map-for-planning.service.gov.uk/

Or 

https://flood-warning-information.service.gov.uk/long-term-flood-risk/postcode

eastmidsaver

hi, yes we checked both of those sites.
it is strange as both are gov. websites.  the planning one put it in the "area benefits from flood defences", which appears second highest risk......  and the other one states it is low risk.
 i can only assume insurers use the planning one.

i looked at the comparison sites for him this morning,  and only 3 quotes come up,  but all are underwritten by the same company, and companies i've never heard of before.   as pointed by poster above,  they all use simply business, so didn't bother going to other sites.

in the past there has never been a problem getting cover on that property,  but reading information online it appears that in the last few years more and more insurers are protecting themselves from flood risks (either high excess, or just removing flood from policy) or just not wishing to offer cover at all.   i think this is because of the amount of storms increasing over the years due to climate change.

doing some research online there appears to be some options such as:

flood flash - a different type of insurance that pays a set amount, depending on the height the water reaches on your building. the higher you set your trigger point , means the lower your premium.   
and also,  the lower you want the set payout to be, the lower the premium.  

flood assist - appears to be an insurer just for flooding only.  but premiums could be high.

flood excess insurance - they will cover the excess amount only, then your insurer pays the rest.  unsure how expensive this will be.

i think in reality, it is unlikely flood would happen,  but it just seems uncomfortable knowing that you need to pay an excessive excess if it does happen,  due to a landlord being classed as a business.     if the house was a normal residential then there would be much easier due to the flood re scheme, as pointed out by poster above.

Sandtree

eastmidsaver said:

 i can only assume insurers use the planning one.

i looked at the comparison sites for him this morning,  and only 3 quotes come up,  but all are underwritten by the same company, and companies i've never heard of before.   as pointed by poster above,  they all use simply business, so didn't bother going to other sites.

in the past there has never been a problem getting cover on that property,  but reading information online it appears that in the last few years more and more insurers are protecting themselves from flood risks (either high excess, or just removing flood from policy) or just not wishing to offer cover at all.   i think this is because of the amount of storms increasing over the years due to climate change.

They may do, or they use software like RMS which for a given policy will calculate both the annualised and catastrophe claim amount using a combination of data - ie it can differentiate between a 1 floor paper mill and a 30 story block of flats even if both insured for the same amount.

The fact they are all just the same broker means they are far from a full view of the market and so really are just the same as calling a random local broker. You need to continue the leg work of checking with others yourself.

The other consideration of what has happened is Flood Re. Normally insurance considers a common pool where you'll have poor risks that you are lucky with and good risks that have an unlucky bad event; premiums reflect the risk but the fact its a pool means there's some cross subsidising. Landlord is commercial insurance but has a lot of similarities with Home and some will consider the two together for modelling purposes. Flood Re only applies to Home and so suddenly the pool of poor risk insurance has gotten smaller and those with poor risks now have higher premiums (or go beyond appetite). 

The other option is that the flood model has been updated, I've dealt with model updated with RMS and you can get wild swings in premiums simply because the logic in the model has changed between the two versions.

eastmidsaver

thanks.   so would you say the best thing to do is advise him just to ring up different brokers directly?   

emilyjane92

Yes, I would say ringing a few landlord insurance brokers is your best bet. Each insurer will have its own rules on flood risk properties. Some will use the gov sites mentioned, some will use their own claims history with customers, some just maps of people near water. And of those found to be a risk, you will get different premiums, excesses, terms, etc. I don't think you will need to get the other types of insurance you are talking about, you just need to find the right landlord insurance policy for you which may take several phone calls or website forms. Speaking to neighbours to see what they do is also a good option as they are in the same boat.

Sandtree

emilyjane92 said:

Speaking to neighbours to see what they do is also a good option as they are in the same boat.

In principle a good idea but if they are owner occupied properties then their insurers will have access to Flood Re which will be significantly helping with the premiums whereas your potential insurers wont because of it being a Landlord policy.

user1977

emilyjane92 said:

as they are in the same boat.

Sounds like they might need a bigger one.

eastmidsaver

thanks.  i will pass the advice on.... and if anyone can recommend any good and reliable brokers, then that would be appreciated.

Annemos

That is an excellent question.

In the advice on this site, it is sometimes said, that people have tried to buy policies, that are not suitable for particular sets of circumstances.  So they should consult brokers. 

And there is also criticism that homeowners don't know enough about Insurance Policies, such as whether they have Matching Sets included etc. 

But for many normal homeowners, the problems we have with the actual policies themselves, are also there if we have to go to Brokers.

If we are not in the Industry and don't have the knowledge, just how do we find a Broker for a certain set of conditions?  E.g. the Poster's circumstances here.

Are there specialised brokers for certain areas of insurance? 

(It's a shame they don't teach this sort of thing at school!)