Homeowners left high and dry as flood insurance agreement nears conclusion

Published: 03/04/2012

It is estimated 200,000 properties are at risk of being left uninsured for flood damage as the insurance industry and government’s “gentleman agreement” regarding the issue is set to come to an end after June 2013.

Under the current Flood Insurance Statement of Principles, the government is responsible for flood defence. In turn, insurers would include flood cover as standard for low risk properties built before January 2009 as well as allowing high risk homeowners to automatically renew existing cover with the same insurer providing flood defences planning is in place within five years.

However around a quarter of homeowners could find themselves unable to renew their insurance policies, and thus leaving many in breach of their mortgage contracts, as an ongoing dispute over who pays for the flood defences remains unresolved.

Esure’s Adrian Webb is concerned:

“The government can’t force insurers to compensate consumers for its own failure to invest in flood protection. If an agreement can’t be reached one of two things will happen; either cover will become unaffordable in areas where there is a strong likelihood of flooding or costs will rise for everyone. The areas identified by the ABI would probably be hit first.”¹

Homes at most risk of flooding:

Constituency Number of at-risk homes
Boston and Skegness 7550
Vale of Clwyd 7339
Folkestone and Hythe 7196
Windsor 7125
Runnymede and Weybridge 6541
Clwyd West 6160
Aberconwy 5500
Nottingham (south) 5043
Great Yarmouth 4965
Sittingbourne and Sheppey 4295
Leeds (central) 4209
Canterbury 4199¹

¹The Guardian (Jan 2012)

Content correct at time of publication

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