Flood resilience and resistance factsheet for insurers and loss ...

3 FLOOD RESILIENCE AND RESISTANCERestoring a property after flood damage using acombination of flood-resilient and flood-resistanttechniques could reduce the costs of future floodingfor that propertyWhy promote flood resilient repair?Restoring a property after flood damageusing a combination of flood-resilientand flood-resistant techniques couldreduce the costs of future floodingfor that property 1 .• Flood resilience – reduces damagecaused by any water that gets insidethe property• Flood resistance – reduces the amountof water that gets inside the propertyBoth could allow insurance to remainavailable to the customer, in line with theABI Statement of Principles 2 , and couldeven influence future premiums chargedor terms applied.The issue of flood resilience and resistanceis rising in prominence. The Government isnow considering the feasibility of usingflood-resilient repair and installing floodresistantmeasures as additional optionsfor the long-term management of floodrisk. Many are looking to the insuranceindustry, with its direct link to customerswho have been flooded, to help encouragegreater uptake of such measures,particularly during repair.There are more than two millionproperties at risk of flooding in the UK,with approximately one quarter of theseproperties at significant risk of flooding(greater than 1.3% annual probabilityor 1-in-75 year chance). Even with thesubstantial increases in Governmentinvestment in flood management since2002, large numbers of properties couldremain at significant risk of flooding.These properties will mostly be in ruralor isolated areas, which may be too costlyto defend using capital flood protectionschemes, given the relatively low numberof properties benefiting.1 Preparing for floods ODPM October 2003.http://www.odpm.gov.uk/pub/112/PreparingforfloorguidePDF587Kb id1131112.pdf2 ABI Statement of Principles on the provision of floodinsurance, Association of British Insurers, November 2005.http://www.abi.org.uk/Display/File/Child/553/statementofprinciples2005.pdf

4 FLOOD RESILIENCE AND RESISTANCEWhen are flood-resilient repairsand flood-resistant measuresappropriate?There is a growing range of simpleproducts for keeping low-levelfloodwater out of a property. For deeperor more prolonged periods of flooding,water could still enter through the floorand brick/blockwork walls and speciallydesigned systems are usually required toprovide flood resistance, so it may alsobe advisable to use these in conjunctionwith a pump and a sump. In these cases,making the inside of the propertyresilient to floodwater may be morecost effective.Flood resilience could limit damagecosts and reduce the amount of timethe property may be uninhabitable.For floods deeper than one metre,you should allow water to enter theproperty to prevent any structuraldamage that could be caused by abuild up of water outside.The chance of flooding to a propertyand the likely depth of water will bothbe key factors determining of the scaleand nature of flood-resilient repair thatis most appropriate.A flood risk assessment (responsibility ofthe customer) should be used to ascertainthe level of flood-resilient repair that isappropriate for the property. The CIRIAguide on flood repairs provides a veryuseful decision-making process that linksrisk levels to appropriate scale of repair 3 .For properties that will continue to havea significant risk of flooding, it could becost-effective to repair a flooded propertywith a comprehensive suite of floodresilienttechniques. Flood claims for theseproperties could range from £15,000 -£45,000, compared with £5,000 - £30,000for a resilient property.Most properties that have been floodedcould benefit from some degree of floodresilientrepair. Some resilient techniquesdo not cost substantially more than likefor-like,and could be appropriate to repaira range of flooded properties.3 Standards for The Repair of Buildings following Flooding.CIRIA 2005 http://www.ciria.org/acatalog/C623.html

5 FLOOD RESILIENCE AND RESISTANCEWhat types of flood-resilientrepair are effective?For properties vulnerable to repeatedflooding, it is important to limit damagecosts and reduce the amount of time theproperty is uninhabitable by making theinside of the property more resilient tofloodwater damage. This could involveusing repair specifications that willprovide some advantage in reducingwater damage to walls, floors, andfixtures. By re-organising the insideof the property some valuable andfunctional items (including servicemeters and boiler) could be raisedabove the likely level of a future flood.Some flood-resilient measures do notcost much more than like-for-like,including moving services (electrics,boilers, and service-meters) well abovelikely flood level, and could be used forthe repair of all properties that have beenflooded. This technique will typically costless than £1,000 extra for the repair, andcould save more than £2,500 after thenext flood.Other measures are more costly thanconventional repair, but will often payfor themselves after a single flood, i.e. theextra cost of installing flood resilience maybe more than offset by the damage costssaved after the next flood. Examples include:• Replacing gypsum plaster with morewater-resistant material, such as lime plasteror cement render and renovating plaster• Installing water-resistant doors andwindow-frames (e.g. plastic or waxedgood-quality hardwood, where appropriate)• Replacing the usual chipboard kitchenor bathroom units with plastic or steelequivalents (where these are appropriateand cost-effective), e.g. plastic kitchenunits with removable, waxed goodqualitywooden doors• Replacing timber floors with solidconcrete (only where appropriate), usingtiles and a water-proof membrane toprevent water penetration into concrete• Removing patio doors and installingconventional doors and windows withbrickwork construction underneath• Installing one-way valves into drainagepipes to prevent sewage backing up intothe houseSpecialist advice should always beobtained before repairs are commissioned.By carrying out these measures, theproperty could be cleaned, dried, repairedand re-occupied more quickly, reducingdisruption to the customer and minimisingcosts to insurers. Some evidence suggestscustomers could only be out of their housefor 3 - 4 weeks instead of 6 months,depending on the depth of flooding.Installing the full suite of measures couldadd £10,000 - £15,000 to the cost ofrepair, but may save at least £5,000 -£12,000 in each subsequent flood 4 .What about flood protectionproducts?Flood-resilient repair can be combinedwith a range of flood-protectionproducts to attempt to limit:1. Amount of water that enters the property2. Costs to repair material damage3. Amount of time the customer is outof their propertyThere is a growing range of products forkeeping water out of a property. Somehave been awarded the British StandardsInstitute “Kitemark”, and some havealready proved to be effective in actualflood situations. A full list of accreditedproducts is available from theEnvironment Agency.The most common individual propertylevelproducts include aperture protectionsuch as door-guards, and airbrick coverssuitable for short duration flooding, andbuilding “skirt systems” that caneffectively isolate the whole propertywhen flooding is more prolonged. Thesecan only protect a property up to a certaindepth of water. Brick-walls will usuallyonly keep the floodwater at bay for ashort period between 20 - 60 minutesbut they can buy valuable time. There mayalso be some landscaping options for theoutside of the property, including bundingwalls and gates with seals, extra ditchesfor drainage and garden landscaping.There are now systems available thatcan provide comprehensive solutions toprevent water from entering the propertyin a prolonged flood.Typically costs of property-level floodprotectionusing aperture protection canrange from £2,000 - £6,000 to deal withlikely flash-floods. Dealing with prolongedflooding on larger individual propertiescan cost between £20,000 - £40,000,depending on the scale and sourcesof floodwater entering the property.Indications from the limited studiescurrently available have shown thatappropriate flood protection couldreduce claims costs by 50 - 80%.Further details on the most appropriatemeasures for the home are available fromthe Flood Protection Association and theEnvironment Agency 5 .

6 FLOOD RESILIENCE AND RESISTANCEWho pays for any additional costsof resilience or resistance?One of biggest misconceptions aboutflood-resilient repair is that all theadditional cost will fall on insurers.The ABI has made it clear that membersare willing to work with customers inreinstating their homes to flood-resilientstandards following damage, providedthis is cost-neutral. If the cost of floodproofingis substantially greater thanthe standard repair, then insurers willonly provide funds to cover thestandard repair.However, there are now some goodoptions available to households to coverextra costs. In addition to householderscovering the balance from savings, theCouncil for Mortgage Lenders haveconfirmed that many lenders are willingto consider extending mortgages to coverthe additional costs of repairs providedthe homeowner has sufficient equity.You should advise customers to talkto their lender about this.In addition, the Government is lookinginto the feasibility of offering financialsupport for pilot studies 6 to install floodresilientand flood-resistant measures inappropriate properties. The WelshAssembly Government and some localcouncils (e.g. Carlisle) have alreadyestablished pilot grant schemes forproperty-level measures.In the long term, adopting such measurescould make it easier for an insurer tocontinue to provide cover to a homeownerliving in a high flood-risk area (in line withthe ABI Statement of Principles). Therecould even be a possibility of improvedterms if a comprehensive system of floodprotection is undertaken and the impacton flood risk properly assessed.How to make flood-resilientrepair happen?For properties in areas of significantflood risk where flood-resilience andflood-resistance are most appropriate,the loss adjuster should discuss optionswith the customer. Many customerswill not know that they could havetheir property repaired in a floodresilientmanner. This should be madeclear to them at the start of the repairprocess. The ABI has prepared acomplementary factsheet “Repairingyour home or business after a flood –how to limit damage and disruption inthe future” (jointly with the NationalFlood Forum). Copies can be downloadedfrom the website and should be passedon to flooded customers. Alternatively,insurers and loss adjusters may chooseto badge the publication jointly anddistribute through their own channels.The different options should be discussedwith the customer, including implicationsfor any costs that will fall directly to them.Claims-handlers may also like to liaisewith underwriting colleagues to discussimplications on the customer’s futureinsurance premium/excess.Before undertaking major renovations,it is essential to get advice from aspecialist, who could undertake acomprehensive flood risk assessmentand recommend an appropriate set ofmeasures for the property. The tablein the customer factsheet identifieskey organisations whose members couldprovide such a service. Any repairs canbe undertaken in a way that is sympatheticto the style, character and period ofthe property.Flood risk assessments are best consideredat an early stage in the flood-repairprocess when the effects of the flood arestill at the forefront of the customer’s mind.The Flood Protection Association hasrecently developed a service, which isprofessionally indemnified, to undertakeflood risk assessments and designappropriate solutions. This service aimsto provide a cost-effective protectionsolution to deal with properties atsignificant risk of flooding.4 Flood Resilient Homes, Association of British Insurers, April2004. http://www.abi.org.uk/Display/File/Child/553/Flood_Resilient_Homes.pdf5 Damage Limitation Guide, Environment Agency.http://www.environmentagency.gov.uk/subjects/flood/826674/830330/8769706 First Government response to Making space for waterconsultation, Department for Environment, Food and RuralAffairs, March 2005. http://www.defra.gov.uk/environ/fcd/policy/strategy/msw1exec.pdf

For more information, contact:Association of British Insurers51 Gresham StreetLondon EC2V 7HQ020 7600 3333The Chartered Institute of Loss AdjustersPeninsular House36 Monument StreetLondon EC3R 8LJ020 7337 9960 / 0845 3459 960www.abi.org.ukwww.cila.co.uk