Home and Contents Insurance. Global warming threatens home owners.

The value of some homes could fall by up to 80 per cent in coming years due to the increasing risk of floods courtesy of global warming.

If global warming continues, by the year 2030, the 1.5 million homes already at risk, could mushroom to 3.5 million.

The Royal Institution of Chartered Surveyors warns that if you can't get insurance for your house, it's value will fall as mortgage lenders will not lend on homes deemed uninsurable.

According to a survey, 6.5 million homes are already at risk from flooding, 1.5 million of which are in 'high' risk areas.

Meanwhile, the government has completed flood defenses in many such areas and protection for a further 80, 000 homes is due this year. However, concerns have now been expressed about a further 120, 000 new homes in the 'high risk' zone of the Thames Gateway.

In 2003, the Association of British Insurers (ABI) agreed principles which committed UK insurers to offering home and contents insurance for properties in areas which are assessed to be at a flooding risk once in every 75 years or more.

However, the principles were that the flood defenses had to be already in place or were to be completed by 2007.

The Department for Environment, Food and Rural Affairs (DEFRA) has the responsibility of developing and maintaining these flood defenses. But, due to insufficient progress on the defenses the insurance industry has raised widespread concern and warned the government of a withdrawal on the commitment if progress should remain slow.

In the meantime, those with homes in areas threatened by floodwater could find their insurance premiums soaring. Whilst the insurance industry agreed to provide insurance cover, their commitment was simply to maintain premiums at a 'reasonable' level.

However, there was never any indication of what 'reasonable' defined and as a result, premium increases of 60 per cent have been common with increases of up to 400 per cent in risky areas. In country areas where DEFRA considers the cost of defending a cluster of a few homes to be uneconomic, some cover has been withdrawn completely.

Environmentalists are now warning that unless DEFRA acts now, the UK's current bill for flood damage could rise from - 50 million a year to up to - .2 billion. Presently, the average insurance claim for household flood damage is even higher than that of fire damage at a staggering - 0, 000. To put that into prospective, localised events such as the 2004 flood at Boscastle, Cornwall, can cost the insurers over - 5 million.

If you are in any doubt whether your home or proposed home is in a flood risk area, visit the DEFRA website at www.environment-agency.gov.uk. The website can tell you whether or not your home is at risk of flooding by assessing maps originally designed for planning purposes although, information is only provided on a post-code basis.

While many insurers use the DEFRA information, others, such as More Than, use their own maps to assess homes individually rather than by post-code areas. This means that if your existing insurer increases your premium for flood risk and uses the DEFRA information, you may still be able to get a cheaper rate using an insurer who assesses it's own flood data.

With pressure now mounting and concerns over the effects of global warming increasing everyday, unless the government acts and increases its spending on flood defenses soon, the insurance industry will very likely discontinue their commitment to the 2003 principles. That could be very bad news for many homeowners across the UK and could quiet literally cost billions of pounds in the not too distant future.

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