Floods cause car insurance price hike

The recent floods have left thousands of car owners “financially submerged”, uSwitch.com has warned. The research conducted by uSwitch.com found that motorists in the worst-affected areas could see premiums rise by up to 57% following a flood-related claim. It also highlighted that some fully comprehensive policies are sketchy when it comes to flood cover.

According to uSwitch.com, more than a third of a million motorists, 25% of those living in flood risk areas, don’t have adequate insurance cover for flood damage to their vehicles. Third party fire and theft policies, often favoured by younger drivers who cannot afford fully comprehensive insurance, do not provide flood cover. Many motorists therefore had to personally foot the repair bill after the waters receded, or were forced to write off their vehicle altogether.

If you are a motorist affected, or potentially affected, by flooding, you are advised to:

• Check your policy documents to establish whether flood cover is included, and ask your broker for clarification if you are not clear about the cover. You may be ineligible to claim, for example, if you restart your car after a flood and cause an electrical failure.
• Consider a fully comprehensive policy if you currently only have third party theft and fire cover and live in an area of high flood risk. You can check flood risk for your postcode by visiting the Environment Agency website.
• If you do live in a flood prone area, consider switching to a provider which offers specific flood damage cover.

The value of motorists’ claims following the recent flooding is thought to total around £2.5 billion. In a bid to recoup this money, many insurance companies will be increasing premiums. It is reported that in Gloucester premiums would rise by up to 57% for drivers who had only a three year protected no claims discount (NCD). Many insurers offer optional NCD protection. Motorists may find it worthwhile to pay an additional premium to protect their NCD, as it allows them to make one claim during an insurance year without losing the no claims discount.

Consumer website, The Motley Fool suggests looking at newer insurers and brokers, as established insurers, like NIG, Zenith, CIS, Royal & Sun Alliance, Provident and Fortis, are currently more costly. Brands like Marks & Spencer which offer insurance may also be a good bet – they are under less pressure to claw back lost profits compared with car insurance specialists. Be wary of very cheap quotes though – your premium may rise when you come to renew the policy to make up for the introductory discount. And if you do live in an area of high flood risk, paying more for comprehensive car insurance now could pay dividends if your vehicle is damaged in a future deluge.

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