Insurers have warned they might not be able to provide cover in flood-prone areas of the UK unless the Government commits more funding to the provision of flood defences.
Following yesterday’s announcement of the Government’s Comprehensive Spending Review (CSR), flood victims will now not only risk losing their homes or sustaining substantial damage but will not be able to claim on their insurance.
The Association of British Insurers (ABI), who have been pushing for more Government resources since the summer floods, have said that the allocation of £2.15 billion is woefully inadequate considering the total cost of the damage is currently estimated to be in the region of £3 billion.
Stephen Haddrill, the ABI’s Director General, comments: "The insurance industry is helping tens of thousands of people affected by flooding this summer, but the Government has now failed to play its part. Millions of homeowners and businesses around the country have been let down by the Government’s failure to commit sufficient money to new and improved flood defences. The Government will have to increase spending substantially as needs are identified by the Pitt review team."
According to the ABI, the money allocated for the next three years falls below the level requested, even before the flooding, and does not take into account the spending needed to address the main issue of drainage which was highlighted this summer.
Commenting on the Government’s decision, Director of Fair Investment Company, James Caldwell says: “While many people can sympathise with the insurers who are currently operating at a loss, it’s the UK householder who is picking up the bill for the Government’s inadequate flood prevention measures.
“We wait with interest to see the results of the ABI’s forthcoming review of its Statement of Principles on the Provision of Flood Insurance. The fact is this issue is not going to go away and both the Government and the insurance firms have a responsibility to ensure that the public are protected. “
This summer saw parts of the country suffer their worst flooding in 60 years, with areas in the South West, in particular Gloucestershire, losing power and having to rely on emergency water supplies following flood damage to treatment plants.
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