How can property sector professionals help homeowners understand flooding?
- What flood-associated risks do homeowners face?
- What flood risk support can property sector professionals offer to homeowners?
- Make an enquiry about FloodSmart Analytics
In their recent Flood Action Week press release, the Environment Agency and Floods Minister Rebecca Pow MP revealed one in six residents are at risk of river and sea flooding with thousands more vulnerable to surface water flood risks.
Homeowners were additionally urged to prepare for flooding in the 2022/23 winter and spring period given the seasonal increase of wet weather and unpredictability of floods.
Yet despite the growing risks, the majority of homeowners do not appreciate their vulnerability, nor understand what information will help them.
As climate change intensifies, heavy rainfall and storms will become commonplace making it even more important to understand what actions can be undertaken to mitigate flood risk.
But the responsibility of preparing for such events does not lie solely with the homeowner – surveyors, conveyancers and other property sector professionals also have a part to play and should ensure the data and information they use to support homeowners with flood preparations is accurate, specific and considers all forms of flood risk.
What flood-associated risks do homeowners face?
The risks associated with flooding can be classified into three categories: physical risk, timing risk and credit risk.
Whilst the first of these is relatively obvious and easy to comprehend, the latter two are less so, and should be explained to homeowners who are unaware of them.
Physical risk refers to the risk of damage to property or assets and is dictated by topography and location. Such damage may be caused by one or more of the four flood types – river, rain, tidal and groundwater.
Each of these flood types has a separate mechanism and can converge with others in some circumstances.
Homeowners can mitigate the financial consequences of physical risk by purchasing an appropriate insurance policy and should do so even if the property qualifies for the Flood Re scheme.
Timing risk arises from the fact that homeowners, particularly if they have a mortgage, have to pay for buildings and/or contents insurance for many years.
To make things worse, predicting the availability of such insurance policies will become harder as climate change worsens.
The final risk associated with flood is credit risk which describes the impact of flooding on a borrower’s ability to service a loan, obtain or renew cover, address property value impairment and claim non-recoverable losses.
Informing homeowners of these risks is imperative and will ensure they hold the same level of understanding of flood-related risks as shareholders.
It is important to note that these risks will be subject to new financial disclosure rules in 2023.
What flood risk support can property sector professionals offer to homeowners?
There are three main ways that property sector professionals can help homeowners address flood risk.
- directing homeowners to the Environment Agencys’ flood map to assess a property’s long term flood risk.
- ensuring homeowners have appropriate and high-quality insurance policies in place.
- using high-level flood risk data to inform clients when advising on house condition, loans secured on a property, or other sustainability assessments.
To understand these actions in more depth, here is a breakdown of key points to consider for each.
Environment Agency flood risk map
To help both professionals and homeowners better understand the flood risks of an area, the government provides a service which informs users of a location’s flood risk.
Users are required to put in a relevant postcode and the service will provide a basic flood risk indicator.
It is vital that future and current homeowners are directed to this service; knowing an area’s flood risks will help property sector professionals and their clients to set out what further mitigation measures could be taken.
Buildings insurance and contents insurance are the two main types of home insurance that homeowners should have to cover potential flood damages.
It is essential that insurers, brokers or other relevant professionals advise homeowners to take out contents insurance on top of a buildings insurance policy for additional protection.
Property sector professionals should also point homeowners to the government’s Flood Re scheme, a re-insurance initiative that was established to offer better flood cover for homeowners living in a flood zone 2 or 3.
Professionals should ensure they direct clients to the Flood Re tool in particular, which tells users whether their property qualifies for the scheme and clarifies whether the insurance policies they offer will cover a homeowner’s accommodation fees, should the client need to evacuate their home due to flooding.
Recently constructed properties do not qualify for Flood Re coverage and are exposed to market forces on pricing and availability of cover. The Flood Re scheme is due to end in 2039 and a replacement scheme is not currently in scope.
High-level flood risk data
On top of the above steps, property sector professionals should also offer their clients the option to obtain better quality data where there is an existing flood risk. This may require a forward-looking assessment or the illustration of a climate-related threshold level.
Acquiring this kind of information will help property sector professionals to provide a better duty of care to their clients; access to property-specific flood risk data, which accounts for climate change, topography and other external factors, will vastly improve advice given to homeowners.
A good example of this is the consumer guide to flooding published by the Royal Institute of Chartered Surveyors this month which provides a range of advice, from recommendations on how to prepare for flooding to flood response actions.
GeoSmart’s FloodSmart Analytics is a leading model in the production of flood risk data and can reliably illustrate a property’s susceptibility to different types of flooding.
The data suite can analyse the type and depth of flood risks impacting a specific property, an entire portfolio or anything in between.
The high-level data provided by FloodSmart Analytics builds on the information provided by the government’s flood map and can improve the advice given by property and financial sector professionals to their clients – from a surveyor’s flood risk report to risk management decisions developed between a conveyancer and their client.
Make an enquiry about FloodSmart Analytics
Developed by GeoSmart’s flood risk specialists, FloodSmart Analytics is a unique data suite which can support the responsibilities of professionals from the property and financial sectors.
To make an inquiry about FloodSmart Analytics, please get in touch with our team for more information.