Wednesday, June 25, 2008

Flood report: Insurers back calls for action

Guardian (UK): Insurers have called on the government to act in response to today's review into last year's devastating floods. The independent report, carried out by Sir Michael Pitt, called for fundamental changes to the way in which the UK responds to the increased risk of flooding due to climate change.

Following the events last summer, insurers dealt with 180,000 claims and paid out £3m to flood victims. Nick Starling, head of general insurance and health at the Association of British Insurers, said: "The government must act now to develop a long-term flood strategy. This must focus on better co-ordination, a thorough reassessment of the flood risk from rivers, drainage and the sea, adequate investment, and better public information on flooding." He added: "All this is crucial to ensure that flood insurance remains widely available and competitively priced."

Insurers have followed a voluntary statement of principles on flood insurance since 2002, under which they offer flood insurance as standard for properties where the risk of flooding is no greater than once every 75 years. Where the risk is greater insurers will continue to offer cover if adequate defences are planned within five years. If they are not, insurers say they will "work with homeowners to see what can be done to reduce the flood threat".

However, Peter Gerrard, head of insurance research at comparison site, warned: "Looking forward, insurers may be reluctant to insure homes in flood risk areas, especially for properties where a claim for flooding has already been made….

The syndicates at work inside Lloyd's of London, where the basement does not flood.... or does it? Photo by "phogel," Wikimedia Commons via Flickr, under Creative Commons Attribution ShareAlike 2.0 License

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