Flood Risk and Insurance

May 2013

Flood Risk and Insurance

Water that causes flooding can arise from different sources — e.g. from surface water (i.e. rainwater flowing over or accumulating on the ground before it is able to enter rivers or the drainage system); overflowing or backing up of sewer or drainage systems which have been overwhelmed; groundwater rising up from underground aquifers; or from overflowing rivers or coastal storm surges. You should be aware that in recent years, there has been an increase in flood damage caused by surface water flooding or drainage systems that have been overwhelmed.
The Environment Agency’s Flood Map for England and Wales is available to view at www.environment-agency.co.uk

By clicking on the map, you can find out more detailed information on the probability of flooding for a smaller area (the 50x50 metre square where your property is located). This information is divided into three probability bands (low, moderate and significant as defined below), produced by the Environment Agency’s National Flood Risk Assessment (NaFRA). This takes into account the location, type and condition of local flood defences. It shows the probability that land, not individual properties, will flood. We do not hold information on floor levels, construction characteristics and designs of properties.

The three probability bands within the NaFRA are as follows:


The chance of flooding in any year is 0.5% (1 in 200) or less


The chance of flooding in any year is 1.3% (1 in 75) or less, but greater than 0.5% (1 in 200)


The chance of flooding in any year is greater than 1.3% (1 in 75)

It is important to remember that the chance of a flood occurring is there at all times – this year, next year and future years.

The Environment Agency makes information available to insurers. This is flood risk probability data referred to as NaFRA (National Flood Risk Assessment) and is also on the Environment Agency’s website. Insurers will typically supplement this with more detailed information on flood risk — from their own tailored mapping products, from past claims history, and from other data providers. Furthermore, insurers are always open to receiving additional information about an individual property’s flood risk from reliable sources, e.g. independent survey or flood risk assessment.

The Environment Agency’s National Flood Risk Assessment for England & Wales assesses the likelihood of flooding for the whole of the Extreme Flood Outline (the extent of a flood with a small annual chance of flooding, a 0.1% (1 in 1000) flood from rivers and the sea, meaning only an extreme flood event would cause flooding out to this extent).

The assessment includes flooding from all rivers with a catchment size greater than three square kilometres, and all flooding from the sea (both along the open coast and tidal estuaries). Rivers with smaller catchments are also included in the assessment where they are within the area that could be affected by an extreme flood from a larger river.

The assessment takes into account the type, location and condition of flood defences, and the chance of these defences being overtopped or breached during major floods. The likelihood of flooding and the consequent costs (economic damages) are assessed for each 50 metre square area in the flood impact zone.

This likelihood of flooding is an estimate based on the information currently available. It may change in future due to climate change, new research data or other factors.

The National Flood Risk Assessment does not take account of other forms of flooding such as from highway drains, sewers, overland flow or rising groundwater.

Insurance cover against flooding is generally available for the vast majority of properties in the UK.
However, insurers cannot guarantee to provide cover in all circumstances.

In assessing flood risk, insurers take all sources of flooding into account, not just that from rivers and the sea. However, assuming that there is no particular concern about flooding from other sources, in areas classified within the Environment Agency National Flood Risk Assessment where the likelihood of flooding from rivers or the sea is ‘Low’ or ‘Moderate’, ABI members will offer flood cover in the normal way on buildings and contents policies to homeowners and small businesses. This applies to both existing policyholders and new customers.

Until June 2013 in areas classified within the Environment Agency National Flood Risk Assessment where the likelihood of flooding from rivers or the sea is ‘Significant’, where defences will be built or improved within five years, ABI members will also continue to provide cover to existing policyholders, provided the standard of protection to be offered is 1.3% (1 in 75) chance or better. Furthermore, where a homeowner in one of these areas sells their property, their current insurer will continue to provide cover, subject to satisfactory information about the new homeowners. For small businesses changing ownership, ABI members will seek to continue cover, subject to satisfactory information on the new owners and, for example, any plans on change in use of the premises.

In areas where the likelihood of flooding is ‘Significant’, where no improvements in permanent defences are planned or feasible and the annual chance of flooding is more than 1.3% (1 in 75), insurers will not guarantee to provide cover in all cases. However, where there is a history of flooding in areas where the likelihood of flooding is ‘Significant’, and where no flood defences are planned, insurers will use best efforts to work with policyholders to establish on a case-by-case basis, what action they, the Environment Agency, the Local Authority or Water Company can take to enable cover to be continued.

In all cases, insurance terms are set by the insurer and will reflect differing degrees of risk. There may be reasons that are not related to flood risk which mean that an insurer may choose not to offer insurance.

For more information, please contact Sarah.Plumridge@parrottandcoalesllp.co.uk