A FRUSTRATED landlord has hit out at a “laughable” 500 per cent increase in his landlord insurance for a one-bedroom flat which is said to be at risk of flooding – despite being 60 feet in the air.

Derek Gordon’s third-floor Cambria House home flat is located next to the River Usk in Rodney Road, Newport.

But Mr Gordon, who lives in Blackwood, said he was left dumbfounded when Direct Line insurers told him his monthly bill is rising from £118.96 to £637.95.

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Mr Gordon was first told his premium would see a substantial rise in 2017. Then paying £97, he was told it was rising to more than £500 due to the perceived flood risk.

To make matters worse, the flooding excess on Mr Gordon’s flat was priced at £10,000, while his contents were only insured for £8,800 – meaning he would be liable for the full amount should the worst happen and a 60-foot flood engulf the flat.

After a discussion though, the insurers agreed to lower the amount.
Mr Gordon said: “I told them I was on the third floor, which is about 60 feet in the air.”

In an apology letter dated August 16, 2017, a Direct Line employee wrote: “I referred your case to our underwriting team who agree we should not apply a greater premium based on flood risk when the excess in place means you would be unable to claim under this section.

“Our underwriting team has agreed to reduce your premium back down so that it does not include a loading for the risk of flood.”

But Mr Gordon has now been told the reduction should never have been issued and the increased amount is correct.

“They’re saying that last year was a mistake on their part, and they should never have lowered it,” he added.

“It’s laughable really.

“I’m getting stung for renting out the flat.

“If I rented it out unfurnished, then the tenants could pay the contents insurance. 

“If that flat gets flooded then the insurance will be the last thing I’m worried about – I’ll be busy building an ark.

“It feels like I’m being punished, because realistically it’s not as if the flat is ever going to be flooded.”

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A spokesman for Direct Line said that while the property is several floors above ground level, flood damage to the foundations could impact the entire building and its residents, meaning the occupants could have to be rehomed while works are carried out.

He added: “Our insurance premiums are calculated using a wide range of rating factors based on the information provided by customers, how likely they are to make a claim and our view of their risk.

“We recently updated our flood assessments to include enhanced geospatial analysis of risk. 

“Unlike many insurance providers, we analyse individual property risk rather than postcodes or the general local area.

“Last year Mr Gordon was able to benefit from a reduced premium.

"However, this was an error on our part and we are not able to offer the same discount this year. 

“We can confirm that the premium quoted this year is correct and in line with our standard process.”