The prevalence of extreme weather events certainly seems to be a more common occurrence and the UK has certainly not escaped its share of major floods and storms over the last decade. There is both an emotional and financial cost in the aftermath of such events and where previously some of the financial burdens were covered by insurance this is now not always the case.
Since 2016 a government backed reinsurance initiative called Flood Re has helped domestic policyholders obtain flood insurance at reasonable cost. Providing the eligibility criteria is met insurers can choose to tap into the reinsurance scheme where the premium is fixed depending on the council tax banding of the property.
Unfortunately obtaining flood insurance for businesses or blocks of flats is a lot more complicated and insurers are increasingly making use of flood mapping software that can pinpoint exact postcodes. This often results in insurers either excluding the flood risk completely or imposing a very high flood excess.
So, what can be done and what if a property has suffered a previous flood loss? In my opinion the answer is a new insurtech solution called FloodFlash. They install a sensor at the client’s chosen property. The insurance pays out a chosen sum if water reaches a trigger limit. For example, a policyholder could choose a £10,000 pay out if the water level reaches 20 cm trigger point. You can select up to three separate trigger points, spreading the payout across each for the most effective and affordable cover.
FloodFlash approves 97%+ of all quotes for the riskiest properties in the UK. That means this really could be the solution for businesses that have previously struggled to secure cover. Plus, if a policyholder has already put in measures to reduce their own flood risk this is usually reflected in a lower premium.
From a broker and policyholder perspective this is a real advantage. A policyholder no longer has to stay with an insurer that is offering flood insurance cover with a high excess. A broker can look at maybe more competitive insurers that are excluding flood and arrange top up flood cover from FloodFlash to meet with the policyholder requirement. FloodFlash can be used to cover the cost of repairs to buildings, damaged stock and business interruption. There are no restrictions on how to use the payout, it is just up to the policyholder to choose the trigger depth and the amount they receive in a claim.