Insurance
Latest News
- 11 July 2008 - The Association of British Insurers and the Government reach agreement that ensures flood insurance remains widely available now and in the long term and have issued a joint statement. The agreement outlines the actions that both Government and the industry will take over the long term. News release: Agreement on flood insurance is good news for customers.
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 advice for customers affected by 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. This was revised in 2006. 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 agreed to work on a fundamental review of the Statement of Principles.
The revised statement, agreed in July 2008, ensures that 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.
Resilience and Resistance
If people are able to take measures to reduce flood risk to their individual properties, it may increase insurers' willingness to offer cover. Defra is working with Communities and Local Government (CLG), to assess how to increase uptake of property-level flood protection and resilience, and thereby reduce the cost, disruption and health impacts of flooding.
- Grants Pilot Scheme - We have funded six pilots (£500,000) to examine the feasibility of developing a grant scheme for householders on flood resilience. These pilots have now completed.
- Developing the Evidence Base - We have commissioned new research into the economics of property-level flood protection and undertaken a survey of over 1000 households and businesses to understand better the barriers to taking up such measures..
In addition, CLG has been working on developing resilience standards for Building Regulations. This project has produced technical guidance and regulations, subject to the outcome of current research and a public consultation.
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modified: 11 July 2008
Page published: 29 August 2003