Insurance implications of flooding on a farm

Farmland submerged near Macroom, Co Cork after Storm Desmond. Photo: John Delea.
Farmland submerged near Macroom, Co Cork after Storm Desmond. Photo: John Delea.

Theresa Murphy

Our legal expert on the insurance implications of flooding and the steps to take if you are a victim of flooding.

Recent years has seen attention has turned to the many home and business owners, including farmers, around the country who have found themselves submerged in difficulties as a result of recent storms. The Government is now considering the introduction of a 'UK style levy' to fund flood cover for homeowners who cannot buy policies.

However, in its absence, it is time for all property owners to consider their positions when it comes to insurance for flooding and what they should do if they find themselves the unfortunate victim of our weather.

First Steps

For those concerned about the location of their property and its proximity to flooding the first step is to assess whether there is a real risk of flooding in the future.

The Office of Public Works provides access to a database of areas which may be at risk of flooding.

It is worth logging onto to assess the likelihood of this issue in the future. If you feel your home or your property may be at risk of flooding you should contact your home/property insurance broker/provider to find out what your current level of cover is for flooding.

You should check exactly what is covered, for example, if your home is flooded, will your policy pay for alternative accommodation while your home is being repaired?

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If you find that your neighbourhood is an area which is liable to flood, consulting your neighbours about a combined prevention effort in the event of flooding could prove useful.

Contents Insurance

For many the loss of the contents of their home to flooding is as bad if not worse than the damage to the building itself. You should check that you have insurance for the contents of your home.

Many people living in rental accommodation will only have insurance for the contents and will be in a position to make a claim for damage and loss, even where the landlord chooses not to.

Bear in mind that the loss adjuster, although advising of what items are suitable for repair and what should be replaced, s/he is acting for the insurance company and if you disagree on these you should have an independent advisor assess this aspect of the claim.

Remember that when you apply for your contents insurance you will have put a value on the entire contents of the property. This figure will be an upper limit for the claim and even if the loss exceeds this figure you will not be in a position to recover that sum.

Also, if the loss if less, you will only be entitled to the actual loss incurred.

Loss of profits

For those farmers who have had to move stock and effectively stop their farming enterprise as a result of flooding you should consult your farm policy as some policies contain a 'loss of profits' or 'loss of business' provision that will allow you to claim for the suspension of your business for the relevant time.

You should contact your insurance broker/provider to ascertain whether you have this cover included.

Getting Reinsured

For those living in areas with a high risk of flooding you will be accustomed to the fact that many insurance companies will not even provide a quotation for this type of insurance cover.

Also, if your property is flooded as a result of a freak incident and would not normally be liable to flooding and you have to make a claim on your policy, you are not likely to be able to obtain insurance when your policy expires.

At present there is very little that people can do about this other than to take precautionary measures when they are carrying out repairs to try to keep the cost of a future flooding to a minimum. This will do little to put minds at ease.

All we can hope for at this stage is that the insurance sector and the government put in place a mechanism to protect the many people in this unenviable position.

Making a claim

If your home has been flooded you should take time to record the damage in as much detail as possible. Take photographs of the property and continue to do so as the property dries out. This will be useful in quantifying the damage and loss.

It is essential to keep receipts for all expenditure on the repair works, but also for expenditure associated with the inconvenience of having to leave your home.

Notify your insurance company as early as possible of a potential claim.

The first action that your insurance company will take is to send out a loss assessor/adjuster.

The loss adjuster/assessor sent out by the insurance company is being paid by the insurance company and will inevitably assess the cost of repair at the lowest possible cost to the insurance company.

As the insured person, if the damage to your property is significant you may want to consider bringing in your own expert to ensure that you will have accurate figures to put forward to the insurance company.

Most insurance policies will not cover the cost of this independent expert, but if the claim proceeds it may be money well spent in terms of the final claim.

The timing of some repair work is important.

Ensure that the property is treated properly to limit damage from mould and damp.

Also, securing the property including the contents after the flood has receded and even before is essential to protect personal effects in the property.

In the case of any claim for compensation, the Courts will always examine whether there has been adequate 'mitigation of loss' by the claimant.

What this means for anybody making a claim is that you have to do your best to ensure that the costs which you incur are kept to a minimum.

For example, just because your home is in need of repair and you have insurance cover for the cost of alternative accommodation, the cover will not pay for you to stay in a five star hotel for the duration of the repair.

It is a matter of exercising reason. You also need to be reasonably quick in tending to the damage.

Theresa Murphy is a barrister based in Co Galway

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