The Association of British Insurers (ABI) has told the government that it will not renew the Statement of Principles for flood insurance, according to Insurance Age.
On the same day MPs called on the government to “take responsibility” for flood protection.
Chair of the Committee of Public Accounts, Margaret Hodge MP, warned that no one appeared to be taking responsibility for upwards of 800,000 properties in England which are at risk of flooding. Flood damage costs over £1 billion per year and Ms Hodges believes that “It is not acceptable that local people should be left in doubt about where responsibility and accountability lie”.
According to a list, issued by the ABI, Boston and Skegness, both in Lincolnshire, are most at risk of flooding.
The Statement of Principles is an agreement between the government and the insurance industry where insurance companies are obliged to offer flood insurance, if there are plans in place to reduce that risk within five years, as part of standard policies. The current agreement commenced on 11 July 2008 and will expire on 30th June 2013.
Homes built after 1 January 2009 are not subject to the Statement of Principles, leaving both developers and purchasers to ensure that the property can be insured for flooding.
The ABI believe that the agreement has “grossly distorted the market” with homeowners in areas at lower risk paying more, effectively subsidising higher risk properties.
The end of the Statement of Principles could see many homeowners unlikely to obtain flood insurance when it comes to renewal this year.
Today’s Conveyancer, bringing you the latest conveyancing news and updates.
