AA SUPPORTS LGA
FLOOD CONCERNS
·
Changing
weather patterns
pose insurance
challenges, AA
Insurance says
AA Insurance
has expressed
support of the Local
Government
Association’s
report* on flooding
today (Thursday
19 July),
which expresses
concern about
availability of
future flood
insurance after the
so-called ‘Statement
of Principles’ ends
next year, says AA
Insurance.
The car and home
insurance broker
says that the need
for agreement
between the
insurance industry
and the Government
must be reached
urgently. However,
no decision is
likely until after
the summer recess by
which time, there
will only be nine
months before the 30
June 2013 end of the
‘Statement of
Principles’.
Simon Douglas,
director of
AA Insurance says:
“I agree with the
LGA that the delays
are very
frustrating. They
are alarming for
ordinary families
wondering whether
they will be able to
insure their home,
with all the
implications that
has for the value of
their property and
ability to obtain a
mortgage. Those
wanting to move will
also find it very
difficult to sell up
because no-one will
want to buy an
uninsurable home.
“More and more
people will find it
hard to obtain cover
for their homes if
they are one of the
330,000 identified
to be in ‘high risk’
flood zones, as
their next renewal
will occur after the
end of the current
agreement and with
no certainty of what
will replace it.
“Some can only
obtain or continue
insurance if they
agree to a high
excess, if at all.
Excesses as high as
£10,000 for a flood
claim are not
unusual, a sum that
most families would
struggle to pay.
“It’s also vital
that local
authorities
concentrate on
making sure that
their own flood
defences are
constantly improved
and maintained for
the benefit of local
communities.”
Recent heavy rain
has shown that the
type of weather is
increasingly
determining which
areas are flooded.
Claims for flood
damage are coming
from homes affected
by surface water
run-off as well as
rivers overflowing,
meaning that many
have suffered in
places where there
was thought to be
little or no
likelihood of
flooding.
“Insurers are very
aware of the change
in Britain’s climate
that seems to be
bringing more
frequent severe
storms,” Mr Douglas
says. “They are
also becoming very
sophisticated at
identifying flood
risk to the extent
of a once in a
century expectation,
but such homes
shouldn’t have
trouble obtaining
cover.
“But insurers must
ensure that they
have sufficient
reserves to meet
future claims which
means that home
insurance premiums
for everyone are
likely to continue
rising; we believe
by up to 6% over the
coming year.”
The
AA’s
British Insurance
Premium Index, due
to be published next
week (Wednesday 25
July) is expected to
show that over the
past year, the cost
of a typical
buildings policy has
risen by nearly 7%.
Mr Douglas adds:
“It’s also important
that when
flood-affected homes
are repaired, that
additional
resilience is built
in which will help
to reduce the cost
of flood claims in
future.”
It is estimated that
recent flood claims
will cost the
insurance industry
£500m,*** according
to figures published
by the ABI yesterday
(18 July).
It has also been
reported that in
some areas, that as
many as 1 in 8 homes
flooded over the
past month were
uninsured. “This
underlines the value
of home insurance,”
Mr Douglas says.
“Just because your
house has never been
flooded doesn’t mean
that it never will
be. Many families
have found that out
to their cost.” |
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