Simon Douglas, director of AA Insurance, has warned some homes could become uninsurable later this year as no agreement has been reached to extend the “Statement of Principles” that ensures flood-prone homes can continue to be insured after 1 July 2013.
He said: “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 5.2m families estimated to be at risk from flooding.”
He also claims the 10% budget cut at the Environment Agency together with the Department for Environment, Food and Rural Affairs seeking an increased contribution of more than 300% from local resources to tackle flood protection issues will complicate things further.
Douglas 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.”
The Public Accounts Committee has published its “Flood risk management in England “report today which Douglas says includes “a range of sensible recommendations”.
He added: “These 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.”
Douglas has also warned 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% last year while the cost of contents cover rose by 11.2% (to £157 and £81 respectively).
And he added: “With continuing concern about climate change, this upward trend is expected to continue.”
