The dramatic scenes in Wales and on the South coast this June have brought flood insurance into sharp focus once again. In 2000 the insurance industry and the government set up a short term agreement, the ‘Flood Insurance Statement of Principle’, to ensure that people living in homes which were at possible risk of flooding would still be able to acquire insurance with their existing insurer if they already had flood cover. When the agreement ends, in June 2013, it will pose serious problems for thousands of home owners across the United Kingdom as many insurers will no longer be obliged to offer flood cover to people whose homes are at risk, with the consequential negative effects on property values and the property market as a whole.
The government and the insurance industry are still looking at a way forward but many underwriters have said they are not prepared to consider flood risk unless there is a strong commitment from local and national government to a fully funded programme of flood defences in high risk regions.
Although the current ‘Statement of Principle’ doesn’t end until next year we have already noticed a significant difference in the availability of flood cover across the market and in some cases we have had to work hard to find appropriate protection for clients in high risk flood areas. While we remain hopeful that there will be a positive solution before June 2013 there is no certainty on this issue at the moment, however we are always happy to offer advice and help where we can.
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