Councils worry over end of insurance agreement

13th March, 2012

The Local Government Association (LGA) says that councils and residents close to water could be left facing an £11billion bill, due to “unfair and unaffordable” insurance premiums, when the current arrangement between the councils and government runs out next year on 30th June.

Representing more than 350 local councils, the LGA is demanding a “safety net” arrangement between the Government and the Association of British Insurers (ABI). The arrangement should set out to provide cover to over 200,000 flood-risk home owners who will struggle to get insurance.

The LGA said that “huge swathes” of the population will be priced out of home insurance. Cllr Clare Whelan said: “The insurance industry has a responsibility to help people manage risk and should not be allowed to hand pick low-risk homes while leaving those most in need high and dry.”

She went on to say “It is imperative that the insurance industry commits as soon as possible to providing affordable and fair insurance premiums once the current safety net agreement expires next year.”

It is hoped that insurers would use the latest information on flood resilience measures, adopting a shared understanding of flood risks, when setting premiums so that people in areas where the risk of flooding is low do not face disproportionately high premiums

 

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