A couple of weeks ago I wrote an article regarding Flood Insurance in the UK and the issues surrounding the Statement of Principles which will expire in June 2013 – see flood insurance.
There is an growing concern that homes at risk from flooding will become uninsurable.
This agreement between Insurers and the Government guarantees that affordable Flood cover will be available for homes and small businesses providing the Government spends money on reducing the overall risk by improving and building new Flood defences.
There has been continual pressure on the Government to confirm what agreements will be in place beyond June 2013 and it seems that we are now starting to receive details of future plans.
Defra chief Caroline Spelman has confirmed that the Government are now in close discussion with the ABI and are looking at various models that have been proposed.
One option apparently under serious consideration (if not already agreed) is that the Government would act as the Insurer if no other could be found through a Flood Risk Pool.
It is likely that this will only be an option for low-income house owners, possibly using a voucher system, but it does at least look as though plans are moving in the right direction.
There is also a lot of Government interest in a reinsurance solution with capped property premiums.
We can only hope that the momentum now continues towards finding an affordable means for everyone to be able to obtain Flood insurance – recent weather patterns in the UK over the last couple of weeks suggest that flooding is now becoming a year round possibility.
Latest ABI estimates that 260,000 properties in the UK at risk may well be reviewed in view of recent changes in weather patterns (apparently caused by a movement in the Gulf Stream).
Claims estimates are also increasing almost daily as more areas are affected this Spring; latest forecasts are for amounts up to £12bn by 2080 – a 10 fold increase from this year – a sobering thought indeed.
What are your experiences? Are you a broker finding it harder to write flood insurance? Or have you experienced loss of cover as a consumer? Let us know below!