ABI urges Government incentives to prevent flooding
by Gill Montia
Government ministers have met with representatives from the insurance industry to discuss how best to deal with the cost of claims following the recent floods.
The bill facing UK insurers as a result of the June floods is currently estimated to be in the region of £1.5bn, with 31,200 homes and 7,000 businesses having been affected, mainly in the Midlands and northern England.
According to the Association of British Insurers (ABI), the meeting with ministers was very constructive and the ABI is now urging the government to look to the longer term and provide the construction industry with incentives to ensure all newly-built homes are protected from flooding.
At the same time it wants local councils to urgently undertake improvements to drainage systems.
So far, the government has pledged to increase flood defence spending from £600m in 2007 to £800m a year by 2010/11.
However, insurers have remained critical about the level of government spending on such defences.
In 2005, the government and the insurance industry reached an agreement whereby insurers consented to continue to offer cover for homes at risk of flooding.
Unless the government fullfills its side of the agreement, it is possible that people at risk of flooding could be refused cover in the future.