Immediately after the flooding, applications from residents in Sheffield, Doncaster, Hull, the West Midlands and parts of Scotland leapt by up to 300 per cent in June compared with the previous month on the moneysupermarket.com price comparison website.
Richard Mason, director of insurance at moneysupermarket.com, said: The increase in the number of people applying from areas affected by heavy rain is no surprise.
Clearly, homeowners who narrowly escaped the floods this time have realised that without any insurance cover they could be left footing bills for tens of thousands of pounds in the future. Annual home and contents insurance on typical homes in areas such as Doncaster, Sheffield and Edgbaston can be as little as £101 to £117.
The surge in applications comes amid reports that insurers are considering the possibility of blacklisting up to one million homes built on flood plains.
According to the Environment Agency, about 2.3 million homes are built on flood plains. With 40 per cent of property owners in the UK electing not to have home insurance, there may well be over 900,000 homes on flood plains without cover at the moment.
Mason said: For now, insurers say they will still abide by the terms of a deal they reached with the government in 2002. This states that insurers will continue to offer cover for those already insured and take on new business where defences are in place or planned.
At present, the evidence suggests premiums have not yet risen in the aftermath of the floods. In an attempt to maintain market share, insurers may well absorb much of the claim costs from reserves. However, if the government ever reneges on its part of the deal to build more flood defences, then cover may either be withdrawn or premiums spiral to as much as ten times current costs.
Homeowners whose properties are on flood plains are being urged to buy good-quality home insurance immediately. Doing so ensures they will continue to be covered regardless of what happens in the future.
