Flood risk is rising, and it is posing insurance problems for landlords – and residents

All of the families hit by this year’s Warrington flooding were found temporary accommodation, either in Torus-owned housing or hotels. But some might never return to their homes, many have lost treasured possessions, and most of those forced out had no home contents insurance. “The main barrier to that was the cost,” says Mr Warburton.

Torus’ residents in flood-risk areas had already seen insurance premiums increase after the January flood of 2021, when Storm Christoph swept through North West England. Ann Hoyles, 63, is one of the Torus tenants who was forced out of her home in Bewsey, Warrington, by flood water on New Year’s Day. Although her home contents were insured, she has found the claims process to be arduous and stressful, and fears she may struggle to get cover again.

“I am very worried that making this claim will cause my next insurance premium to be much more expensive or, even worse, that I might not be able to get re-insured”

“I’ve had to provide proof of my tenancy agreement, evidence my home was in a flood and to compile a ‘lost list’ spreadsheet with not only receipts of items bought, but also the replacement cost and a photograph of each item being claimed for,” she says. “I am very worried that making this claim will cause my next insurance premium to be much more expensive or, even worse, that I might not be able to get re-insured.”

Torus helped Ms Hoyles complete her online claim and has been linking her up to other organisations which offer practical support it does not provide.

But with the likelihood of floods increasing, there is only so much any landlord can do to mitigate the impact on their tenants.

“You can’t even imagine what this means for the families,” says Alana Durnin, chief executive of Cloch Housing, a 1,500-home landlord in Inverclyde, western Scotland. Cloch Housing has been forced to evacuate tenants from six homes following two floods in a 10-month period between 2022 and 2023.

“These are new build houses that were built in 2012 and they’re absolutely fantastic,” Ms Durnin says. “The people that lived in them have been there since the start, so it’s a really tight-knit community. Five of the families have got children. In one of the families, the lady is blind; she’s elderly and her husband uses a wheelchair. Thankfully, that family hadn’t moved back in [when the second flood happened in October 2023] because we were waiting on a stair lift to be installed. You can just see the trauma that they are going through.”

All families affected by those floods have been rehoused in alternative Cloch Housing accommodation, but it has still left the association with six empty homes in the midst of a housing crisis.

One of the reasons these homes remain empty is that they are still uninsured for future flood damage. Cloch Housing does not want to rent them out again until some level of cover is in place, a decision on which is expected imminently.

The rise in insurance premiums for residents in flood risk areas hits social landlords too, of course. Associations have seen premiums jump up five-fold after the London flash floods of 2021, a snapshot survey by our sister title Social Housing found in 2023.

For Cloch, the cost to insure its homes has more than trebled in three years, from £94,000 in 2022 to £298,000 today. And although it is confident the six empty homes will be insured soon, any new policy is expected to come with a much higher excess per property. This exposes the landlord to a hefty liability which has a knock-on effect on its bottom line.

“After the first flood, we had to ringfence £300,000 to cover the higher excess,” says Ms Durnin. This sum had already been factored into its calculations for rent levels. “The challenge is trying to keep rents as affordable as we can, but you have to balance that with costs incurred,” Ms Durnin adds.

Mr Warburton outlines a similar situation at Torus. “We saw our premiums increase by 20% last year,” he says. At the time we spoke, the association’s budget was just being examined by the board – and insurance premiums going up are a consideration. “We know we’re going to get another increase in our premium this year because our claims have gone up.”

“After the first flood, we had to ringfence £300,000 to cover the higher excess”

Like all policies, Torus’ flood insurance only covers specific things, mostly to do with the fabric of buildings. “It doesn’t cover the cost of decants; it doesn’t cover the cost of hotels; it only covers the rent loss. So we’ve had to pay the rest out of our pockets,” Mr Warburton says.

And these uncovered costs can amount to significant sums. The cost of hotels, food and other subsistence costs for residents affected by the most recent flood will likely reach £400,000, he adds. “That’s £400,000 we’re not going to spend on other things.”

While the management of floods is nothing new for social landlords, some are increasing their focus on emergency planning.

Climate and sustainability team

Despite its broad geographical footprint, The Riverside Group was not hit by the January floods, but the 75,000-home landlord is no stranger to the devastation they wreak. Severe flooding in December 2015 damaged large swathes of its stock in Cumbria, where it owns nearly 10,000 homes. In response Riverside established a dedicated climate and sustainability team, which collects detailed data on flood risk.

Mark Lea, group head of health, safety and environment at Riverside, says it is also seeing “greater excess levels” on insurance claims, but believes that collecting and maintaining good-quality data helps landlords to have more nuanced conversations with insurers about risk.