Is it worth risking it all for cheap insurance?

Picture the scene, you wake up early one morning with the sound of the wind blowing and rainfall bashing against you bedroom window. You ease yourself out of bed, walk down your stairs and are faced with your home under 6 feet of flood water.

And so begins the long and distressing process of recovering from flood damage. And imagine your shock and horror when you call your insurance company only to be told you don’t have the cover you thought and your claim is rejected!

This horrific scenario whilst uncommon could well be on the increase as home and business owners seek the cheapest possible insurance premiums without first looking into the cover they actually provide.

Mark Burdett, Marketing Manager of Gateshead based Northern Counties Insurance Brokers had this to say, “The recent flooding many parts of the UK has seen is likely to have an adverse affect on insurance premiums with insurance companies like Norwich Union already announcing price increases. One of the problems with increased insurance premiums is that people will naturally look to cut costs by shopping around for the best deal. The potential downside to this is that they then opt for the cheapest premium quoted without actually looking into the cover it provides. And unfortunately this could well result in cover not being in place which may only come to light when a loss occurs and they find out they aren’t covered.”

So with flood claims seemingly on the increase for many home and business owners, Mark suggests people when looking to buy home or business insurance make sure they:


1. Get the cover actually required. For home owners this could mean accidental damage whilst for business owners’ business interruption could be more beneficial. Many of these types of cover are often sold as optional extras so don’t just be tempted with the lowest premium without understanding what it does (and perhaps more importantly) what it doesn’t cover you for.


2. Know what excess they will have to pay in the event of a loss occurring. One of the ways insurance companies can quote lower premiums is by increasing policy excesses. Make sure your policy has an excess you can afford.


3. Ask for advice and help if in any doubt. Insurance Brokers are a great source for this as they can use their experience to find you the right cover, at the right price whilst making sure you, your home and your business are protected


As a victim of flood damage in the past himself, Mark summed up the risks involved in buying the cheapest insurance possible, “Many people see insurance as a grudge purchase and one which only produces a benefit when a claim needs to be made. I was lucky enough to have the right insurance cover in place when my home was flooded and I would urge anyone looking to cut costs on their insurance to make sure they know the potential consequences of buying the cheapest policy.”

Useful Tips for Avoiding Flooding

The summer of 2007, in the United Kingdom at least, hasn't exactly been what many people and businesses would have hoped for. With record rainfall in many parts of the UK, people and businesses have had to deal with flooding, storm damage and in some cases fatalities.


So is Climate Change anything to do with this unusual summer weather and is it indeed something we should get used to on a more regular basis? Or is summer 2007 just a freak occurence that isn't likely to hit our homes and businesses more often?


If you read the press or watch the news then unfortunately there seems no definative answers to these questions so whilst the "experts" are looking into why these storms and flooding has occured, Northern Counties Insurance Brokers have come up with these useful tips on how you can help avoid flooding for your business.


PRE LOSS

1) Ensure where possible all electrical equipment and stock is stored at least four feet above ground
2) Turn off electrical equipment apart from burglar alarms
3) Turn off the supply to central heating units if at ground floor
4) Move vehicles to high ground if possible
5) Sand bag the premises if there is a high exposure to potential flooding
6) Consider constructing gullies to funnel water to drains
7) Clear all drains and gutters on and around the premises
8) Move high value items away from unmanned premises



POST LOSS

1) Remove debris where possible. If the debris is in any way contaminated, you may need to contact the emergency services
2) Save items of value for inspection
3) If stranded, contact the emergency services immediately
4) Allow ventilation to the premises if possible
5) Consider up to £500 of emergency repairs to mitigate future losses
6) Take all appropriate and reasonable measures to protect the premises from future damage or theft
7) Notify your insurance broker or insurance company as soon as possible


2007 has so far seen many people and businesses suffer due to storm and flood damage so hopefully these few tips will help try and prevent this happening to you in the future.