Homeowners Wave Goodbye to Flood Insurance Cover

Wellington bootsHome insurers are turning away customers in high flood-risk areas while they bicker with the government about how to make cover more affordable.

Householders and businesses are suffering as both sides argue about who pays for flood protection, says the Local Government Association (LGA), the voice of local councils. The LGA claims millions of homes and businesses are at risk because the Association of British Insurers (ABI) and the government cannot agree terms.

The current agreement expires in June 2013, but annual policies for customers in flood risk areas up for renewal since July 1 cover the expiry date and many are being turned away by firms who have offered cover for years.

The government is looking for a deal that does not mean paying out any more public money and insists insurers could reallocate cash they already put aside for flooding to cover claims.

Insurers claim the government is welching on the existing deal, which promises investment in flood defences to safeguard high-risk property. Budget cuts have reduced the money available for projects.

The LGA says homeowners in Nottingham, Worcestershire, Devon, Kent and Huddersfield, have already been refused or priced out of home insurance when they’ve tried to renew their policies.

“It is absolutely vital that government and the insurance industry come to a new deal on providing affordable cover as a matter of urgency,” said Councillor Clyde Loakes, vice chairman of the LGA’s Environment Board. “Households are now being refused cover and left exposed to the risks of damage and destruction.”

An ABI spokesman responded: “Insurers continue to honour their commitments under the current agreement with the government, providing cover to their customers in high flood-risk areas as a standard part of home and small business insurance.

“Insurers are determined that flood insurance remains available and affordable and we are currently in constructive discussions with government to explore how we can achieve this.”

In the meantime the rain keeps on falling and the clock keeps on ticking. Luckily we have still got access to some great flood risk insurance deals via our specialist ‘non standard’ home insurance team.

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