Homeowners in flood-affected properties are paying significantly more for insurance as climate risk continues to feed into housing costs.
New research from Compare the Market shows that properties which have previously flooded now cost an average of £437 a year to insure – £239 more than the UK average of £198.
That represents a 121% premium on typical home insurance costs, underlining the growing financial impact of flood risk on homeowners.
Even properties located near water are seeing higher costs with premiums averaging £210 – £212 above the national average.
HIGHEST PREMIUMS
Regionally, the highest premiums for previously flooded homes are found in Northern Ireland (£754), followed by Greater London (£669) and the South East (£507). Elevated costs are also seen across the East Midlands and East Anglia.
The data comes against a backdrop of rising climate exposure. Around 6.3 million homes and businesses in England are currently at risk of flooding, with projections suggesting this could rise to 8 million by 2050. Similar increases are expected across Scotland, Wales and Northern Ireland.
Despite the long-term upward pressure, there are signs of short-term relief. Insurance costs for previously flooded homes have fallen by 11% year-on-year, while premiums for properties near water are down 10%, reflecting a wider softening in insurance pricing.
However, the figures highlight an increasing divergence in costs depending on a property’s exposure to environmental risk – an issue that is becoming more relevant for buyers, lenders and insurers alike.
FLOOD RISKS
Amy Rootham, Home Insurance Expert at Compare the Market, says: “Our research shows that people living in properties that have previously flooded are paying more than double the UK average for their home insurance, with a difference of £239.
“Even living near water can push premiums up ever so slightly, so you should always shop around and compare policies as this can help ensure you’re getting the right level of cover at a price that’s right for you.
“With millions of homes across the UK already at risk – and climate change expected to increase that number significantly in the coming decades – it’s becoming increasingly important for homeowners to understand their property’s flood risk and consider taking steps to improve resilience where possible.”
