The AA has responded to a Public Accounts Committee report published today (Tuesday 31 January), warning the government that if they don’t act now some houses may become “uninsurable” later this year.
Responding to the Committee’s report Flood risk management in England, Simon Douglas, director of broker AA Insurance, said, “Flood protection is a national priority, yet many people in flood-prone areas may find their homes difficult to insure from later this year.
“People want the government to take decisive action now, to ensure that their homes are protected.
“But that’s not happening with the Environment Agency’s budget cut by 10%. What’s more, the Department for Environment, Food and Rural Affairs is seeking an increased contribution of more than 300%* from local resources to tackle flood protection issues, when local government budgets have been severely cut too.”
Mr Douglas said that the insurance industry is becoming concerned at growing numbers of claims resulting from increasingly frequent extreme weather, including flooding.
“The AA’s benchmark British Insurance Premium Index shows that home buildings premiums in the UK rose by 9.5 per cent last year while the cost of contents cover rose by 11.2 per cent. With continuing concern about climate change, this upward trend is expected to continue.
When the present agreement between the insurance industry and the Government – the so-called ‘Statement of Principles’ that ensures flood-prone homes can continue to be insured – ends on 1 July 2013 there is no certainty that such protection will continue.
“Some insurers are telling us that flood-prone homeowners might not be able to renew their cover later this year, because their new policy will extend beyond 1 July 2013: with all the implications for property value and mortgage availability that this implies.
“That does not augur well for the 5.2 million families estimated to be at risk from flooding.”
Mr Douglas added, “The Public Accounts Committee has come up with a range of sensible recommendations which must be acted upon now.
“Homeowners expect the government to take a lead on this issue: they need some reassurance that they won’t be left unprotected.”
