Blog21 May 2013

Deadline looming for flood insurance agreement

Recent ‘flash floods‘ in Co Durham indicator of more householder misery to come?

The current agreement between the government and insurance companies has committed insurers to providing cover for homes at high risk of flooding at a reasonable cost. The expiry date for this agreement is looming however, and as June 30th 2013 approaches with no sign of a renewed agreement, homeowners in high risk areas are understandably concerned.

Fortunately, the Association of British Insurers has recently confirmed they will voluntarily continue to offer flood insurance for an additional month after the current agreement expires, pushing the end date back to 31st July. This will give ministers and the industry more time to decide what will happen next.

The areas at high risk of flooding affect at least 200,000 properties, but the agreement does not cover those who move to a new home in the area.

If, by the end of July, a deal is still not in place then the freedom for insurers to charge what they like could potentially leave those homes at risk of flooding without insurance. As a result of the concern, the flooding charity The National Flood Forum have said the number of calls to their helpline has trebled in the last year. Some have even cited concerns of being unable to sell their properties.

The effect on not just homeowners but also the property market could be serious if a decision is not reached soon. Some homeowners are already reporting vastly increased insurance premiums, and in one case a small business has seen its premium rise from £4,000 to £25,000 a year.

Chris Graham, Sykes Pumps, said, “With this very important deadline looming, we hope that both the industry and policy makers alike can come to an agreement quickly for the sake of thousands of potentially vulnerable homeowners.

“The delayed discussions are effectively gambling with businesses, homes and livelihoods. The lack of any official agreement will become all too real if Britain experiences another long, wet summer like the last one.”