Flood-hit homeowners face another insurance problem if they live close to fracking sites

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Just when recently flood-stricken homeowners thought insurance situations couldn’t get any worse, we learn that some policyholders will be hit by another blow if they happen to reside in proximity to planned fracking locations here in the UK.

Whilst many householders in the north of England are still picking up the pieces after the unprecedented deluges which saw various parts of the north succumb to breached rivers over the Christmas period, there are now reports that many of these same devastated homeowners might also have to fork out even greater property insurance premiums should their homes be situated within a 5-mile radius of sites earmarked for shale gas exploration.

As the widespread clean-up operation continues in those areas laid waste by successive flood barriers being overcome by the sheer force of nature over the past month, a significant number of people affected are still in the throes of making claims with their household policy insurance providers.

Yet despite a large percentage of these remaining a work in progress, some are now finding out that they should be bracing themselves for a second (or indeed, third of fourth) wave of seemingly soul-destroying policy premium news if they are unfortunate enough to live in one of the proposed fracking sites.


As the whole fracking debate heats up (if you recall, just before Christmas the government granted certain companies new fracking licenses – and therein the go-ahead to begin drilling in the not too distant future), research carried out by The Independent on Sunday in collaboration with Spinwatch shed light on the underlying fact that a worrying volume – said to be in the region of two-thirds of the entire British market – of insurance providers (many of which are considered to be amongst the leading policy exponents in the UK) have admitted that they will not be insuring against fracking-derived (or related) damage.

Confirmation of this will come as a huge blow for householders already fearing that potential contamination caused by polluted water emanating – and subsequently spreading – from a fracking facility compromised during exceptional flood scenarios like the examples the country has just witnessed, concerned that they’ll  have no insurance redress.

Many home insurers exclude contaminated water clauses


It’s the possible contamination situations which might unfold as a direct result of flooding of these underground-based fracking initiatives which stands as a moot point in the opinion of most home insurance providers, with a spokesperson for Direct Line Insurance highlighting this outstanding concern by adding;

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“Although subsidence and earthquake caused by fracking are covered as they are insured risks, there is no cover for contamination caused by fracking as contamination is a general exclusion of our policy.”

Another property insurance giant posed the same questions, Llloyds did nothing to quell fears by going on to add that; “For a claim to be successful, you would have to be able to prove that fracking is the actual cause of the damage.” And to further compound policyholder hang-ups, Axa replied that water contamination; “Would not be covered by home insurance,” and that the homeowner; “Would need to contact their water supplier.”

Essentially this could mean that tens of thousands of householders will run up against a brick wall when it comes to arranging policy features that will safeguard their properties in the event of fracking-related damage. One insurer who will buck this broadly unhelpful trend appears to be Legal & General, where a spokesperson contacted by The Independent offered light at the end of an otherwise frighteningly long tunnel by saying; “There is no exclusion in our policy wording for any loss or damage caused by fracking.”

Looking at the bigger picture and experts have established that some 1 in 5 of the 150 new fracking sites identified for development and exploration going forward are officially designated as being of ‘significant risk of flooding’, with some already having been overwhelmed by floodwaters during this latest series of meteorological events.

Even the shale gas industry and the government themselves (who are pushing ahead with plans) have recognised that the insurance sector doesn’t appear to be doing enough to allay the fears of homeowners; which is quite an admission in itself. And of course, insurance aside, there’s also the consequential matters relating to falling house prices observed in these fracking/flood-prone areas to bear in mind, alongside the risks to public health caused by the leakage of waste fluids via polluted water, which Defra has raised concerns about.