Homeowners and businesses in the UK situated in high risk flooding areas could be left without insurance cover if the Government don’t offer subsidies to vulnerable properties.
As it stands the Association of British Insurers (ABI) have an agreement with the Government to offer cover to properties that experience flooding until June 2013. The agreement could end because the Government have done little to improve flood defences around the UK since the agreement started in 2000.
The agreement says: ‘The Statement of Principles – an agreement between the Government and the Association of British Insurers (ABI) - has been in place since 2000, and commits ABI members to continue to insure properties at significant risk of flooding, provided the Environment Agency have announced plans to reduce the risk within five years. Insurers can charge premiums that reflect the risk of flooding to the property.’
The statement highlights that properties will be protected up until June 2013, during the time from when the agreement started reducing the risk of flooding should have been a main objective for the Government. Search firm Searchflow have estimated that a quarter of UK properties may not be able to get insurance cover after the agreement is up.
ABI spokesman Malcolm Tarling has commented on the agreement saying: “If we cannot reach some kind of agreement in terms of how we can best protect those who are most at risk of flooding then there could inevitably be some people who are effectively priced out of flood insurance.
“We’re not in that position and we’re going to do everything we possibly can to avoid that position.”
Homeowners are expected to be worrying because of the floods that hit the UK last year. The worst hit places were Cornwall and Sutton Coldfield which saw a month’s worth of rain falling in just a day. The floods were not the result of just heavy rainfall but burst water mains and many people were faced with houses destroyed and possessions ruined.
With the prospect of flooding happening again this year, people are more aware when heavy rain falls which is why they need the insurance to help them recover from the after affects of the devastation that flooding can cause.
Insurance for homeowners in high risk areas now have to wait and see what the Government plan to do to prevent flooding becoming another issue for this year.
© Copyright Autonet Insurance
By Amanda Bainbridge