The insurance industry, through the Association of British Insurers (ABI), has said it will continue providing flood insurance post 2002 to ‘the great majority of homes and small businesses in areas at risk of flooding.’
The ABI’s new Statement of Principles has set out the approach member companies should take when assessing flood risk cover, and is due to come into effect in January 2003. However, the term ‘great majority’ implies cover will not necessarily be universally guaranteed as it was under the temporary agreement.
David Quick, managing director of CETA, said: ‘Much depends upon the Government fulfilling its side of the bargain by ensuring adequate flood defences are put in place. If it does not, the ABI’s members may substantially raise the cost of cover for people living in unprotected areas.’
The ABI’s members will have to offer flood cover as a standard feature on household and small business policies, even in those areas only due to have improved flood defences in place by 2007.
In response, Halifax has said it will continue to provide flood risk insurance to its 1.8 million homeowners. Phil Jenks, head of mortgages at Halifax, said: ‘We hope this marks the start of real debate about flood defences involving the Government, lenders and insurers. That debate should be short and focused ‘ the clock is ticking.’