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Esure axes insurance for property at risk of flooding

Halifax-owned general insurance firm Esure has pulled out of offering house insurance in areas at risk of flooding.

Mortgage brokers are now warning that other insurance companies may follow Esure&#39s move. This could leave many people unable to get building insurance cover, meaning they would be unable to get a mortgage for the property.

Brokers believe some insurers may start to specialise in offering cover to houses at risk of flooding but would charge higher premiums. Esure says by cutting back on locations where it will provide flood cover, it reduces insurance costs for many other homeowners not at risk.

The company will not offer insurance for houses built on flood plains or in areas prone to flooding.

Esure says for customers not living in these areas, it means an annual savings of £30 per policy.

It says covering flood-risk properties inflates the cost of cover by between 5 and 10 per cent across the UK and only 10 per cent of homes are in areas in significant risk of flooding. Homes with existing cover will not be affected.

Chief executive Peter Graham says: “Esure is sympathetic to homeowners who live in flood risk or on flood plains but they have been let down badly by years of Government failure to imp-rove the UK&#39s flood funding, planning and defences.

“We are determined to red-uce customers&#39 premiums by focusing on lower-risk cases.”

London & Country mortgage specialist David Holling-worth says: “If other insurers follow Esure&#39s example, some people will not be able to get building insurance, which will make some properties unmortgageable.

“Some insurers may move to specialise in the area, meaning people at risk will have to shop around more.”

Mortgageforce has signed a deal with Andrews Estate Agents to offer independent mortgage advice to its clients.

Mortgageforce consultants will offer advice from the estate agents&#39 chain of bran-ches in Avon, Surrey and London, supplementing Andrews&#39 salesforce of employed mortgage advisers.

Andrews Estate Agents is the 14th-biggest estate agent in the country, with 42 branches in the South-west and South-east.

It claims to be one of the first agencies to sign up to the ombudsman scheme for estate agents in 1999.

Mortgageforce managing director Robert Clifford says: “This brings together two businesses which are pioneers in industry competency and professionalism – ourselves being directly involved in the development of both the mortgage code and Cemap.

“Andrews has been trading since 1946 and has a substantial client base as well as hundreds of new potential clients each week. This provides a significant opportunity for all

“Most important of all, it benefits our mutual clients by providing free, independent advice.”

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