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19 July 2012
Householders are being denied flood insurance because of delays by the Government and insurers coming to a new deal on affordable cover.
A 'safety net' arrangement between government and the Association of British Insurers (ABI) to provide cover to flood-risk homes expires next June, and a new agreement has yet to be reached.
With less than a year of the existing deal remaining, councils have found that some householders who have tried to renew their insurance in the past few weeks have been denied cover or quoted hugely inflated prices.
The Local Government Association, which represents more than 350 councils in England and Wales, is warning that the longer government and industry stall on a new deal, the more households are likely to be denied cover and exposed to the risk of losing their homes in the event of severe flooding.
Government last week announced that councils would receive reimbursement for clearing up flood damage following record breaking rainfall over recent weeks.
But local authorities are concerned that communities will be hit hard if high risk areas effectively become blacklisted by insurers.
Cllr Clyde Loakes, Vice Chairman of the LGA's Environment Board, said:
“The extreme weather we have seen over the past few weeks is a stark reminder of the importance of flood insurance.
“It is absolutely vital that government and the insurance industry come to a new deal on providing affordable cover as a matter of urgency.
“Households are now being refused cover and left exposed to the risks of damage and destruction
“A new agreement should have been sorted long before now and the continuing delays are having a very real and severe impact on thousands of people who will be exposed to the risk of losing their homes if they are unable to find insurance.
“Government has committed to ensuring councils will be fully reimbursed for the cost of clearing up streets following the record rainfall.
“But families are now paying the price for the lack of decisive action from government and the insurance industry and can afford to wait no longer.”
Councils have been calling for clarity on arrangements to replace the current statement of principles for the past two years.
When the north west of England was hit by floods earlier this month, one local authority found that an estimated 100 out of 800 homes affected were without insurance.
Local authorities also know of people in areas including Nottinghamshire, Worcestershire, Devon, Kent and Huddersfield who have been refused or priced out of home insurance because of flood risk.