PRN: Fears as UK Flood Insurance Agreement Comes to an end
Fears as UK Flood Insurance Agreement Comes to an end [12-March-2012] LONDON, March 12, 2012 /PRNewswire/ -- Around 200,000 property owners could struggle to find adequate home insurance in 2013 when the flood insurance agreement comes to an end. The Statement of Principles on the Provision of Flood Insurance has been an ongoing agreement between the government and the ABI (Association of British Insurers) since 2000.
Fears as UK Flood Insurance Agreement Comes to an end
LONDON, March 12, 2012 /PRNewswire/ --
Around 200,000 property owners could struggle to find adequate home insurance in 2013 when the flood insurance agreement comes to an end.
The Statement of Principles on the Provision of Flood Insurance has been an ongoing agreement between the government and the ABI (Association of British Insurers) since 2000. It commits home insurance providers to make flood insurance as widely available as possible.
That has meant home owners have been able to secure home insurance even when living in areas that are at a high risk of flooding. Come 2013, when the agreement ends, this may no longer be the case.
Whilst The Environment Agency insist that they are working with the ABI to enable home insurance providers to continue offering home insurance to residences in flood risk areas, it is unknown whether the statement will be renewed.
The original agreement was made on the condition that the government would invest in making significant improvements to flood defences in high-risk areas.
The current reality is that if the government's investment in flood prevention remains constant, there'll be a rise in the number of properties at risk of flooding. In fact, The Environment Agency estimate that there will be 350,000 more properties at significant risk of flooding by 2035.
For these reasons, some believe that a renewal of the agreement is extremely unlikely. The ABI themselves admit that the flood insurance agreement has led the home insurance industry to provide continual cover to otherwise uninsurable properties.
They claim that the average cost of repairing a home that is damaged by flooding is between Â£20,000 and Â£40,000. Not only that but there was over Â£3 billion of flood-related damage in 2007 and Â£174 million of damage as a result of the Cumbria floods of 2009.
With costs like these the ABI's reluctance to continue the agreement is understandable. However, its termination could leave one quarter of UK properties that are at risk of flooding uninsured.
Valid home insurance is often a condition of mortgages. This means that the end of the flood insurance agreement could leave uninsured homes in breach of their mortgage contracts.
Home insurance premiums for these high-risk properties could also become extortionate. Homes that are hard to insure are often difficult to sell so we could see a significant devaluation in a large number of UK properties next year.
John Lewis Home Insurance provides extensive cover for flood damage. Their home insurance policy includes cover ranging from fixtures and fittings to electronic equipment such as cameras, video recorders and laptops.
In cases of severe flood damage, alternative accommodation may also be required. The additional cost of relocating your family temporarily is also included with John Lewis Home Insurance.
About John Lewis Insurance
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Terms, conditions, limitations, exclusions and eligibility criteria apply. A full copy of the policy wording and the insurance complaints procedure are available on request.
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