Wave of Optimism After Flood Insurance Agreement

It will be obvious from my article a few months ago that there was a serious threat that properties with the highest risk of flooding were in danger of being left high and dry without cover after years of wrangling between Insurers and Government to agree levels of cover versus flood defence spending.

blog-flood-agreementWith the previous agreement due to end on July 31 2013, a “memorandum of understanding” was signed to develop Flood Re – a new not for profit organisation to provide cover for identified high risk properties aiming to become operational by the summer of 2015.

The organisation will be operated and financed by insurers with members paying an annual levy of £180m. The intention is that premiums for affected properties will be capped based on council tax banding.
There is much work to be done and the ABI Director General has referred to the need for “an unprecedented level of partnership between the Government and the Industry” for the plan to succeed whereas the Environment Secretary is regarded by some to have under-estimated the task in hand when he stated that “people no longer need to live in fear of being uninsurable and that those at risk can get protection – now and in the future”!
The fact that there is still a huge gap between the parties is demonstrated by the fact that just a few days after the announcement, a Parliamentary Select Committee slammed the Dept of Environment proposed reduction in spending on maintenance of existing flood defences when a predicted year on year increase of £20M was required to simply stand still.

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