Flood defenses cut costs of insurance
At a recent industry summit, speakers voiced their concerns at the lack of clarity in the continuance of the government’s programme of flood defense work.
Household insurers have witnessed a surge in claims for flood damage to properties and have warned that they will consider an increase in premiums and in some cases, refuse to cover an at risk property all together. It was pointed out that if householders were unable to obtain insurance for their properties, they would not be considered for mortgage lending and would become effectively worthless to their owners and this could cause the collapse in the mortgage markets all together.
The government would need to continue its programme of flood defense work and extend the programme beyond its current cut off point in 2013. There is concern in the industry at the moment that the Chancellor of the Exchequer had only earmarked £500 million a year to spend on flood defences from 2011 to 2015 and is a reduction of £216 million. The Environment Agency has recommended a total of £1billion is needed by 2035 to maintain the number of homes protected at present.
Recent figures show that the general public are not too keen on spending on flood defenses and prefer to let insurance companies pick up the bill. Around 28% of the general public whose homes are threatened with flooding have actively implemented flood defense procedures for themselves. The cost of customer excesses on a home insurance policy would be greatly reduced if the insurer has proof of preventative flood defenses such as the installation of airbrick covers and flood boards.
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