Insurance
Latest News
- 13 February 2008: Joint Statement from the Government and the Association of British Insurers confirms a UK-wide review of the Statement of Principles is to be carried out and that in the meantime ABI members will continue to adhere to the existing Statement.
Statement of Principles
The insurance industry is a competitive and commercial one and makes decisions based on risk. Members of the Association of British Insurers (ABI) are responsible for most domestic insurance covering flood risk in England. Their website contains more information, including a copy of the Statement of Principles mentioned below and also information for customers relating to the summer 2007 flooding.
After the floods of autumn 2000, the ABI brokered an interim agreement with their members that existing insurance cover for domestic properties and small businesses would be renewed in all but exceptional circumstances. This agreement ended in December 2002. Following that, the ABI issued a Statement of Principles for flood insurance which took effect from January 2003. As announced by the Minister of State to the House of Commons on 11 November, this has been revised with effect from January 2006.
Flood cover will be available as a standard feature of household and small business policies for a) those properties defended to a minimum standard of 1 in 75 (in other words where the design standard of defences is such that the probability of the properties being flooded in any single year is 1.3% or less), or b) for those properties where such defences are scheduled for completion within the next five years. Premiums will continue to reflect different degrees of risk.
Review Following Summer 2007 Floods
Following the major floods of summer 2007, and in light of the increasing number and extent of floods linked to climate change, the Government and the insurance industry have begun work on a fundamental review of the Statement of Principles. The review was formally confirmed at a meeting between the ABI and Government on the 12 February.
The scope of the review will include partnership working to:
- Assess the information and mapping currently available and ensure better understanding of flood risk;
- Agree the approach to a long term strategy in order to provide effective flood risk management;
- Promote increased resilience, prevent inappropriate development in high flood risk areas, and address the interim conclusions from the Pitt Review on the availability and uptake of insurance.
The aim is to finalise the review during the summer. Further details will be published in due course. In the meantime ABI members have confirmed that they will continue to adhere to the existing Statement of Principles.
Resilience and Resistance
Resilience measures aim to reduce the consequences of flooding by, for example, facilitating the early recovery of buildings, infrastructure or other vulnerable sites following a flooding event or by ensuring that key infrastructure such as power distribution centres, telecommunication control centres and key emergency access routes have enhanced levels of protection or other mitigation measures. Resistance measures are designed to keep out, or at least minimise, the amount of water that enters a building, or other area of adverse impact, in times of flood.
Following a recommendation from the Parliamentary Select Committee for the Environment, Transport and Regional Affairs, the then Office of the Deputy Prime Minister (now Department for Communities and Local Government) in 2002 published guidance - Preparing for Floods - to advise property owners how to improve the flood resistance of their properties. It was also intended for use by developers, local planning authorities and others involved in construction of new buildings and renovation of existing buildings at risk of flooding.
The Environment Agency publishes advice on
measures that can be taken to protect property from flooding on their
website, as does the ABI
and National Flood Forum. Work on how to encourage the uptake of resilience and resistance measures is being taken forward
as part of the programme to deliver Making space for water. If you are having to repair your property anyway, for example following flooding, this would be a good time to think about building in flood resilience measures.
If people are able to take measures to reduce flood risk to their individual properties, it may increase insurers' willingness to offer cover.
Page last
modified: 13 February 2008
Page published: 29 August 2003