Over 1.5 million cars at risk in flood hit Britain

As insurance companies brace themselves to pick up a £2.5 billion bill for damages caused by the floods, motorists in flood hit areas across Britain could see insurance premiums increase by as much as 57% if they make a claim on a flood damaged car, reveals research by online price comparison and switching service uSwitch.com.

The research shows that one in four motorists (or 375,000) in flood risk areas are not insured against flood damage to their cars, as they have non-comprehensive policies, such as third party fire and theft. Many of those affected are young drivers that are priced out of the comprehensive insurance market; yet cutting corners on their cover in the short term could result in a hefty repair bill, or, even worse, having their vehicles written off altogether.

uSwitch findings reveal that even those motorists with comprehensive policies could be at risk, as many policies are not specific in terms of flood-related cover. Despite the fact that all comprehensive car insurance policies cover damage to a vehicle, many have ‘ambiguous’ clauses or exclusions which could result in claim confusion. If, for example, an attempt to restart a vehicle after incurring flood damage causes an electrical or mechanical fault, the driver could unknowingly be invalidating their claim. Similarly if a motorist attempts to navigate their way through flood water and the vehicle breaks down, this activity could also jeopardise the right to a claim.

Insurers who are non-specific in their policies about flood damage include Direct Line, Churchill, MORE TH>N, esure, Norwich Union Direct, Saga and Swiftcover.

Aron Thompson, Head of Insurance at independent online price comparison and switching service, uSwitch.com, says: “Too many motorists are playing a risky game by failing to secure adequate cover should the worst happen. As the events of the last few weeks have proven, flooding is a real and present threat, albeit an unusual one for British summer time. If drivers do not take the necessary insurance precautions they could be suffering the financial consequences long after the flood water recedes.

“Motorists, particularly those who live in a designated flood area, must ensure they confirm with their insurer the adequacy of their current level of cover and gain clarification on any kind of activity involving their vehicle that could potentially invalidate a flood-related claim. Insurers must also take responsibility to provide their customers with clear, unambiguous information relating to a flood claim at the time a policy is taken out. If a customer feels that their policy isn’t clear, they need to call their insurer immediately to find out what level of cover they have.”

Once a claim is made against flood damage, the worst could still be yet to come for many motorists. Drivers could end up losing their No Claims Discount unless an extra premium has been paid to protect it, and, moreover, it is highly likely that they will see a hike in future premiums as insurance companies attempt to recover the £2.5 billion worth of predicted claims.

In Gloucester, one of the worst hit areas for flooding, those drivers who make a flood-related claim on their car with five years protected No Claims Discount can expect to see their premium increase by 10%, or, by as much as 57% should they have their No Claims Discount reduced to three years following a claim.

Thompson continues: “With summer usually regarded as a time for minimal claims, it will come as no surprise if we see insurers increase premiums across the board as a direct result of the high volume of unexpected payouts this summer. Many insurers have already said that they are unable to rule out increases to premiums, and with the average policy costing £409, it is vital, now more than ever, that motorists review their current insurance policy and ensure and that they have the correct level of cover against flood related claims at the most competitive price. If they find their current insurance cover lacking, motorists must switch to one of the providers such as Yes Insurance, who does offer specific cover against flooding within their comprehensive policy.”

Thompson’s Top Tips if your vehicle is affected by flooding

Get your vehicle checked by a professional mechanic as soon as possible

Do not attempt to drive your car before being told it is safe to do so. You could cause further damage and potentially invalidate a claim

Contact your insurer immediately and seek their advice on the next steps to take

Collate photographic evidence as it may be of benefit when making a claim

If you become involved in a dispute with your insurer regarding a claim, firstly ensure that you have written to their complaints department and received a written confirmation of their intention not to pay for your claim. Once you have the reply and if you are still unsatisfied, contact the Financial Ombudsman Service in writing, by telephone, or via their website