Daily Insurance Industry News
 
 
Daily Insurance Industry News
Tuesday 16th of October 2018
February 27, 2012

Councils angry over £11bn flood insurance problem

by Gill Montia

Story link: Councils angry over £11bn flood insurance problem

Councils in England and Wales are calling for urgent action to tackle an £11 billion flood insurance problem.

According to the Local Government Association (LGA), councils and residents close to water could be left facing an £11 billion liability because of “unfair and unaffordable” insurance premiums.

The LGA, which represents over 350 councils, is therefore demanding a “safety net” arrangement between the Government and the Association of British Insurers (ABI), to provide cover to flood-risk homes once an existing agreement between the two runs out next year.

Last month, the ABI warned that failure to reach a new deal with Government could leave up to 200,000 households struggling to get insurance.

The LGA is fearful that “huge swathes” of the population will be priced out of home insurance and spokesperson, Cllr Clare Whelan, comments: “The insurance industry has a responsibility to help people manage risk and should not be allowed to hand pick low-risk homes while leaving those most in need high and dry.”

She adds: “It is imperative that the insurance industry commits as soon as possible to providing affordable and fair insurance premiums once the current safety net agreement expires next year.”

In letters to Environment Minister, Richard Benyon, and ABI director general, Otto Thoreson, the LGA is calling for:

Government and the insurance industry to urgently outline how affordable insurance will be provided once their existing agreement expires on 30th June 2013.

Insurers to use the latest information on flood resilience measures, adopting a shared understanding of flood risks, when setting premiums so that people in areas where the risk of flooding is low do not face disproportionately high premiums.

Insurers to start taking into account flood risk prevention measures on people’s homes when setting premiums.

According to the LGA, steps like raising plug sockets and anti-flood drainage systems can minimise the potential for damage in the event of a flood, but are not currently recognised by insurers.

 

News posted:



Related stories to Councils angry over £11bn flood insurance problem: