Tuesday 3rd July 2007
Home insurance could be denied for up to half a million properties at risk of flooding, it has been claimed.
An agreement between the Association of British Insurers (ABI) and the government allows for high-risk homes to continue to be covered by existing policies.
However, the moratorium requires that the government invest in flood defences, while including no provision for home insurance to be provided to new customers.
In light of these requirements, the ABI welcomed the news this week that some £800 million per year is now to be spent on flood defences.
Director general Stephen Haddrill responded to the announcement of the budgetary increase by secretary of state for the environment, food and rural affairs Hilary Benn.
Mr Haddrill said: "The government has said that it will stand by its side of the deal - todays announcement is the news that homeowners have wanted to hear.
"This work is urgent and the investment should begin today - lets get on with it and start now."
He added that insurers are "committed" to helping their customers recover from damage caused to their homes by flooding.
But he recognised that more must be done to establish adequate flood defences if insurers are to continue to provide a quality service.
The ABIs statement of principles on the provision of home insurance to areas in danger of flooding notes that "areas of significant flood risk" are not guaranteed cover.
According to the statement, this includes any region determined to have a likelihood of flooding more than once every 75 years.
Meanwhile, minister for climate change and the environment Ian Pearson this week outlined a fund of £500,000 aimed at making domiciles more flood-resistant.
The money could be used to elevate electrical supplies, as well as adding waterproof render to doors and floors, Mr Pearson suggests.
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