UK flood fund underestimates number of homes at risk

Freya Roberts in the Carbon Brief: Building homes and businesses in flood prone areas might be more costly in the future than government expects, according to a new report. A policy paper published today by the London School of Economics says the government's new insurance scheme has seriously underestimated the cost of future floods in the UK. The scheme's failing, according to the research, is that it doesn't factor in the rising number of homes at risk of flooding as a result of climate change.

Fortunately though, a separate new research paper does just that - estimating how the cost of flooding might scale with climate change.

Flooding is one of the biggest natural threats in the UK, and it's set to become even more of a problem in the future. Climate change is predicted to raise the risk of flooding through heavier rainfall and sea level rise, while the ongoing development of floodplains means that when it does flood there's more to lose.

To help homeowners in the most flood prone areas of the country, the government has proposed a new insurance scheme called Flood Re. Through a £10.50 levy on all insurance policies nationwide, the government hopes to raise £180 million per year, which it will then use to compensate flood losses in homes which normal markets consider too risky to insure.

The modelling behind the scheme assumes £180 million will be enough to cover the losses from 500,000 homes at high risk of coastal, river and surface flooding. But today's new report from the London School of Economics (LSE) says the government hasn't "adequately, if at all," considered the increasing risk of flooding due to climate change...

A 1968 flood in Meadrow (on the A3100), shot by Ian Taylor, Wikimedia Commons via Geograph UK, under the Creative Commons Attribution-Share Alike 2.0 Generic license