Flood insurance may be refused from June 2013

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On January 1st 2012, the director, Otto Thoresen, of the Association of British Insurers (ABI) told the government that it will not continue to comply with the statement of principles for flood insurance as when the principle was agreed, in 2000, it was intended to be short-term a measure, not long-term, as its operation would grossly distort the insurance market.

Being “frustrated” by the slow progression of talks with the government he warned the government that action was needed quickly as some 200,000 home owners would be at risk of then being unable to afford insurance after the end of the statement of principles period of operation in June 2013.

He further commented: “We are running out of time to make sure that people in high risk areas are properly protected from the devastation flooding can cause and the ball is now in the government’s court,” adding: “insurers want to make sure that every home has access to affordable insurance, should the worst happen, and we’re concerned that those people most at risk will lose out unless the government considers a safety net.” Also he said: “We are frustrated with the progress of our talks with the government on this issue and want it to look urgently at a model that would allow flood cover to remain widely available and competitively priced.” Finally saying: “No country in the world has an entirely free market providing universal affordable flood insurance, and action is needed now to avoid 200,000 high-risk homes struggling to afford cover.”

The ABI, have said that the current Flood Insurance Statement of Principles, would be honoured until it lapsed in June 2013 but would not be renewed because it grossly distorted the market.

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