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Last Updated: Tuesday, 17 August, 2004, 16:58 GMT 17:58 UK
Q&A: Flooding and insurance
Aftermath of Boscastle flood
The clean-up operation has begun in Boscastle
The flash flood at Boscastle is one of the worst instances of damage wrought by sudden rainfall in recent years. BBC News Online looks at how to cope with flooding and the likely impact on premiums.

What should I do if my home or business is flooded?

If you are unfortunate enough to be flooded, the advice from the insurance industry is clear.

Ideally you should have already ensured that your contents insurance covers the full replacement cost of any items ruined, rather than their current market value.

Contact your contents and building insurer as soon as possible. It is advisable to keep insurance documents in a waterproof plastic bag.

Your insurer will expect you to take reasonable steps to protect property.

Therefore, take easily moveable objects upstairs and, if possible, use sandbags to hold back the water.

For the sake of safety, make sure the electrical supply is switched off at the mains and equipment unplugged.

As for cars and other vehicles, comprehensive insurance should cover flood damage.

However, third party cover won't pay out if your vehicle is damaged by flood.

How can I best cope with the aftermath?

Once the waters have receded, you can take up carpets, but you must retain them so that the insurance company loss adjuster can see them and verify the claim.

Tips on coping with flooding
Contact insurer as soon as possible
Move property to higher ground
Turn off electricity and other utilities
The cost of alternative business and residential accommodation may be covered by your insurer
Source: Association of British Insurers (ABI)

For the same reason, it is very important that you keep all damaged items rather than throw them away.

If necessary, store them outside, in your garden or elsewhere.

Most household insurance policies will cover the cost of alternative accommodation, if the property is uninhabitable.

Likewise, many businesses have business interruption cover, which will pay the cost of alternative accommodation.

No bad thing, since when a major flood event takes place it can take months for insurers to pay out.

How much will the Boscastle flooding cost?

So far there are no estimates of the likely cost of Monday's flash flood.

But the public expense on rescue and clean-up operations is bound to run to many millions of pounds.

As for the cost to local residents, businesses and their insurers, at least 50 cars were washed away by the waters and many buildings in the village were badly damaged.

As for businesses, the short notice - in some cases only a matter of minutes before the flood waters engulfed them - means losses on damaged or destroyed stock are likely to be substantial.

What will happen to insurance premiums?

Properties in areas hit by the flash flood may well see premiums rise.

But across the country, the Boscastle flood is unlikely to raise premiums substantially.

Unlike other floods in the UK - which have hit large areas of the country and in some cases lasted for weeks - the flooding was localised.

The most damaging floods of recent years occurred in the winter of 2000.

The Association of British Insurers (ABI) estimated that those floods cost UK insurers 1bn, for which policyholders are still paying through higher premiums.

Is much of the UK at risk of flooding?

The Department for Environment, Food and Rural Affairs (DEFRA) estimates that 10% of the land area of the UK, encompassing up to 2 million homes and 185,000 businesses, is in danger of flooding.

Despite the Environment Agency's attempts to increase flood awareness, many people living in flood plains are still not aware that they are at risk.

Boscastle, for instance, is located on three rivers and in a valley leading to the sea. Intense rainstorms triggered the flash flood.

What about flood defences?

Big increases in government expenditure on flood defences have recently kicked in.

To speed up work, the government has introduced new flood planning procedures.

However, decisions to build flood defences are arrived at through a cost-benefit analysis.

Put simply, the savings have to justify the expenditure.

Highly-populated flood plains like the Vale of York have passed this test. But less populated areas may end up without defences.

What are the insurance companies doing?

Some insurers had threatened to start cancelling policies unless the government coughed up the cash for flood defences.

But now the programme of flood defence building is under way, the threats have subsided.

However, one insurer is adopting a high-technology approach to their assessment of whether an individual property is at risk.

Norwich Union has digitally mapped the UK and can now calculate the risk of flood to within a few metres.

As well as showing whether an individual property is at risk, the map shows how often a flood is likely to occur and to what depth.

The multi-million pound project launched for new customers in parts of Shropshire and Norfolk, both areas at substantial risk of flooding.


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