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Flood risk poses serious implications for your car insurance

Car water damage

The recent flooding across the UK, climate change warnings and other related incidents are having a significant impact on the motoring insurance industry, reports suggest.

When flooding occurs in a location, it is not just homes and gardens affected but cars as well, as potentially debilitating damage which can be done, ranging from having to replace parts and interiors to the total write-off of a car.

The incidence of floods can lead to mass claims on insurance, which emphasises the importance of checking your policy to ensure it covers damage caused by inclement weather. According to the key elements of a policy, as laid out by the Association of British Insurers (ABI), insurance premiums also vary dependent on the cost of the vehicle and the parts it contains.

Environment secretary Hilary Benn stated on September 23rd the government needs to spend more on the UK's flood defences due to the effects of climate change and growing risks to certain areas, which ultimately can have an impact on motor vehicles, reports New Civil Engineer.

While properties and their adjoining assets in some coastal and flood-prone locations may need to be abandoned in the move, an investment further than the current budget expansion of £200 million is needed to protect the country.

Ms Benn said if people are living in areas where modifications are not possible, the likelihood is that they will have to relocate.

Richard Ashley, professor of urban water at Sheffield University, responded to the bid by telling the publication: "The government needs to help people and communities to develop the capacity to be self-reliant in terms of flood risk management.

"We seem to be moving in the right direction but this is only the start and more realistically targeted money from central government for the local authorities is crucial," he continued.

On the same day, the University of Dundee released a new report bringing to light the future of coastal flooding in Scotland, with Falkirk having 6,000 properties and hence vehicles currently at risk.

Insurance websites warned earlier this month that 1.5 million cars are currently at risk in Britain from floods, with one in four motorists only having third party insurance which does not cover this sort of damage. This is equivalent to 375,000 drivers.

Insurance industry experts advised drivers living in the top areas under threat not to evade the potential short-term savings through creating shortfalls on their polices – perhaps due to the current economic downturn and a growing culture of cost-cutting - as the long-term implications can be much more costly.

Meanwhile, it was reported on September 11th by the Communities and Local Government North-East that floods recovery minister John Healey met with insurance industry leaders to address how they are coping with insurance claims following on from the previous weekend's floods, with the emphasis on insurers helping customers affected by the disaster where possible.

The sector had received around 2,000 claims from the north-east in the weekend of September 6th and 7th, which contrasts against 180,000 made over the summer months in 2007.

It is not just weather-related flooding which poses a risk to the cost of car repairs and insurance premiums, as a recent example reflects.

On September 24th, a water main was burst by contractors working in Crown Street in the Gorbals area of Glasgow, flooding an underground carpark, parked vehicles in the street and the main building of Glasgow Nautical College.

According to reports, many automobiles were damaged by the deluge.

In this instance, MSP for the Scottish National Party Bob Doris, told the BBC the "expensive mop-up and repair operation" would "not affect the bills of ordinary customers", which may involve the costs of car insurance.

Another piece of news affecting car insurance is comment from the BBC which surmised postcodes also have a lot to do with costs of the product, which relates back to the cases of people living in high-risk flooding areas such as Gloucester, Shrewsbury and Sheffield.

Leaving aside risk of floods, the cheapest rates dependent on postcode were to be found in Dundee and the most expensive in east London, the report said.

With government officials moving for more action on increasing the UK's protection against flooding, companies urging for customers to be vigilant of their own policies and the risk of an incident like Glasgow and its implications on communities, it will be interesting to see how the general public will react to the threat floods pose to their cars, whether it will be taken seriously and if it will result in higher insurance premiums and payouts.

24 Oct 2008


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