Homeowners in Bourne End and Marlow are facing insurance premium rises despite being unaffected by the floods of 2000, reports Datamonitor the business information company.

Environment Agency data, which rates flood risk by postcode, is attracting criticism by insurers and residents alike for not being sensitive to the causes of flooding. Homeowners who were unharmed by the widespread flooding of 2000 are nevertheless set to be classed as high-risk under Environment Agency ratings.

In the wake of the 2000 floods, the Environment Agency responded to calls by the Association of British Insurers and undertook a widespread review of flood policy in the UK. Part of this commitment involved the development of a data set that would allow insurers to rate the flood risk of UK homes much more accurately.

The data set, delivered earlier this year, groups houses by postcode area, and has been criticised by insurers for lack of sensitivity to the factors that affect flooding. There are stories from 2000 of houses on opposite sides of the same street experiencing considerably different levels of flooding, meaning that two houses in the same postcode area could have significantly different flood risks.

Evidence for the problems that this may cause has begun to surface, as some households in Bourne End and Marlow are facing premium rises, despite having survived the 2000 floods unscathed. The households did experience flooding during the rainstorms earlier this year, but concern still remains that the use of the government data may lead to inaccurate flood risk rating, and hence unjustified premium increases.

Fortunately, insurers are aware of the problems with the government data. Direct Line stated that it would not be using the rating system as it was not precise enough. Further to this, Norwich Union is currently developing a flood risk map recording the heights of households in the UK, allowing for better segmentation of areas around frequently flooded rivers.

However, if this issue is not resolved effectively, there could be serious consequences for homeowners. They might find that once their property is deemed to be in a flooding 'hotspot', not only could it impact on their insurance premiums, but it could also have an unfair negative effect on the future saleability of their home.