Landlord’s mop up – What to do if you are hit by floods

Summer 2007 has so far been a wet and miserable affair with severe weather conditions affecting many areas across the UK. Flooding has become a real and dangerous issue to home owners, devastating many homes and causing thousands of pounds worth of damage to people’s possessions.

As a property investor and landlord you need to be prepared for any eventuality and understand where you stand legally. Property Secrets’ investment experts provide the following information and advice on the precautionary measures that should be taken:

Insuring a building makes obvious sense because the cost of a fire or flood etc and dealing with the associated consequences such as loss of rent, repair and refurbishment would put most people in serious trouble.

There are lots of different insurance covers available – some provided as standard in landlord’s specialist insurance policies - and some not. Possessions will generally be covered by contents insurance if you have it. Landlords' policies will often include a flexible amount of contents insurance cover to cater for the wide variation in level of furnishings provided by landlords. The fewer furnishings you have, the less insurance cover you will need to purchase and the lower your premium will be. It is the responsibility of the tenant to insure the contents they own.

Most tenancy agreements will state that a landlord will "agree to give a tenant back any part of the rent that paid for covering any period that the property could not be lived in because of fire or any other risk for which he is insured for."

Most policies will also pay cover for the cost of alternative accommodation, up to a specified limit. Typically this is up to 20-25 per cent of the insured value of the property or to a specific amount - say £20,000 to £25,000.

Some insurers will also find temporary property for you or your tenants, but most will just cover the rent (i.e. leaving you to find the temporary accommodation yourself.)

Landlords’ policies will also pay for loss of rent you suffer because your tenants had to move out.

Contents insurance often covers damage to items in your garden up to a limit though flood damage is often excluded from this. Similarly, damage to a garden wall or shed might be covered by your buildings insurance, but again, the exclusion for floods may apply.

It is very important to shop around and make sure you are getting the best deal from insurers and that these eventualities are covered as best as possible. Brokers like Alan Boswell, Hamilton Fraser and Rentguard all have good landlords’ insurance policies that are usually cheaper than the policies from the mortgage lenders.

In the event of a claim situation, such as a flood, it is often useful if your insurer has a helpline service. This ensures that any repairs can be started as early as possible. If not and repairs need to be started anyway, then you must make sure you keep hold of all receipts, so they can be reimbursed at a later date.

Any items that are damaged should be photographed to prevent a dispute later. Expensive items, including carpets should be kept until a loss adjuster has seen them.

Loss adjusters only tend to be appointed where damage is severe and the claim is high and claims may take some time.

If you are flooded, all insurers will expect you to take action to mitigate losses such as moving possessions upstairs but only if to do so is reasonable and safe.

Many people worry that their property becomes uninsurable following a flood. However, insurers have said they will continue to cover homes in flood risk areas where the Government plans to improve flood defences but if no such defences are planned they may cease cover for damage caused by water.

More likely though, there will be an increase in your premiums.

In order to be prepared in advance for any flooding, it is possible to check if your property is at risk and take any necessary precautions.

You can check the Environment Agency website – www.environment–agency.gov.uk and select “ Flood” from the right hand side and enter the postcode.

Insurers Norwich Union and More Than have detailed flood charts which they use internally only. If you call them for a quote they will use these more detailed charts to calculate a premium.

Another website, www.whatsmyfloodrisk.co.uk uses Norwich Union’s information for that you can access for a fee of £15, definitely worth the cost.

Another good source of information is your local water company, who can provide you with any information on flooding caused by blocked storm drains.

As well as using the published flood maps look to see if any property you are buying is raised because that will be a key factor in its likelihood of actually being flooded.