Flood insurance agreement could end in 2013

By Matthew Plant

16 months from now, we'll reach the end of an agreement between the insurance industry and Government that makes sure people can get flood insurance even if they're in a high-risk area.

What happens after June 2013 is uncertain. The agreement (the 'Flood Insurance Statement of Principles agreement') was introduced as a short-term solution back in 2000. It won't just be renewed next year, says the Association of British Insurers (ABI), as it 'grossly distorts the market', since:

• People in less-risky areas are subsidising people in higher-risk areas by paying more,

• People in riskier areas end up tied to their current insurance provider, and

• Insurance companies that are covered by the agreement are responsible for 'disproportionate' numbers of high-flood-risk properties.

The ABI has listed the areas in England and Wales where the risk of flooding is highest, looking at the 573 parliamentary constituencies and the latest flood data from the Environment Agency.

In Boston and Skegness, 7,550 homes are 'at significant flood risk'; in the Vale of Clwyd, there are 7,339, in Folkestone and Hythe, 7,196...

In all, 200,000 properties could find it difficult to get flood insurance once the agreement comes to an end in 16 months.

Image © iStockPhotos / TheBiggles

Tags: flood insurance, Association of British Insurers, ABI, Environment Agency, insurance, floods, weather, law, agreement, flood insurance agreement

Fees payable when continuing service is provided. Repaying debt over a longer period may increase the total amount to be repaid. Calls are recorded and are usually free from UK landlines. Mobile phone users may be charged and should check with their service provider. Cards are provided by third parties and are subject to eligibility, status and terms and conditions. Applicants must be UK residents aged 18 or over.