The ABI said, with the impact of climate change and major developments being considered for areas susceptible to flooding, such as the Thames Gateway, it would have to take a more critical view of insuring new build property in those locations.
Simon Biddle, head of marketing and communications at Infinity Mortgages, commented: “New build is essential so a situation like this doesn’t help matters. It’s a massive problem for lenders as insurance without flood cover is not acceptable. What would be needed is a national scheme, backed by the government, to protect new builds, much like hurricane cover in the United States.”
One claim by the National Flood Forum said ABI members were not insuring properties where the risk of flooding was greater than 0.5 per cent.
The ABI denied it was against new build, but Malcolm Tarling, spokesperson for the association, warned the government it needed to consider its building plans.
“We are not against new houses being built but we would question the government’s intentions. We want to continue covering homes but we must be adequately protected as we are heading into a period where higher rainfall and sea levels are predicted.”
Daniel Clayden, director of Clayden Associates, commented: “We shouldn’t be building in high-risk areas anyway. Insurers are trying to make a profit too but common sense should dictate we shouldn’t be building there.”
However, Chris Traynor, sales and marketing director at Paymentshield, said it would still depend on individual circumstances.
“Different underwriters have different views on risk. We already have some underwriters judging one postcode one way and other in another way and logically, with this, it should depend on the individual underwriter.”
