The price of coverage is expected to soar in areas where floods are known to occur.
Properties that are located in areas that are at risk of flooding in Scotland could soon be facing a considerable increase in the cost of their homeowners insurance now that a deal that had been in place to guarantee affordable protection is nearing its expiration date.
Homes impacted by the winter floods, recently, or that are located in areas of increased risk are being cautioned.
The next time that homeowners insurance policies are renewed on those properties, it is expected that premiums will be considerably higher than they currently are, as central negotiations between the industry and the government have been deadlocked. The current agreement under which insurers have been functioning has stated that coverage must be offered to homes, despite the fact that they may previously have made flooding damage claims or that they are located in areas which have been labeled as having a high flooding risk.
That regulation over the homeowners insurance industry in the country will expire in June.
The homeowners insurance industry and the government have been talking for months in order to try to find a way to extend or replace the current regulation. However, as of yet, nothing has been decided, and it is beginning to look as though there will not be any form of deal created in time ahead of the expiration.
_________________________Random Quotes to Remember ~ “The best investment is in the tools of one’s own trade.” – Benjamin Franklin
The current Statement of Principles would require that the government pay to have flood defenses put into place in order to ensure the homeowners insurance industry’s cooperation in guaranteeing coverage to homes in flood prone areas or that have previously experienced flooding.
Negotiations started back in 2012 regarding a plan from the Association of British Insurers (ABI), which would have capped homeowners insurance premiums and partly levied properties at a high risk of flooding on all policies. However, no agreement has been reached which has been making it more likely that homes with a higher chance of flooding may be left entirely uninsured. This would affect an estimated 5,000 homes in Scotland, alone, and could lead to damage repair bills that are potentially financially crippling, and may even lead to a new mortgage finance block.