Households at risk from flooding will find it easier to buy insurance against damage after a new commitment from insurers. The Association of British Insurers said its 400 member companies would continue to cover customers with homes or small businesses in high-risk areas where improved flood defences were due to be in place in the next five years. Previously, ABI members had only pledged to cover such properties if defences were improved by 2007.
Insurers would also continue to offer flood insurance to customers with homes or small businesses in areas that were adequately protected. However, the ABI warned that it could not guarantee cover for all flood-prone properties and where insurance was available the price of cover would reflect the risks involved. The commitment was also dependent on government action to reduce flood risks.
Elliot Morley, the environment and climate change minister, welcomed the commitment, saying it was underpinned by cross- government action to im-prove flood protection. The ABI said the new commitment would affect about 100,000 homes which were in vulnerable areasfor which improvements in flood defences were earmarked over the next five years. Such sites included Selby in North Yorkshire, Fordingbridge in Hampshire and West Bridgford, near Nottingham.
Stephen Haddrill, director-general of the ABI, said: "This is good news for the millions of homeowners and businesses who rely on insurance for financial protection from the cost of flooding." But he added: "We expect climate change dramatically to increase the flood risk, so continued improvements on the ground are vital. For flood insurance to remain widely available, the government must make further progress in reducing the risk in vulnerable communities."
The ABI said that while insurers would offer a "competitive market", the premiums charged would reflect the risks involved. It said its members could not guarantee cover for existing customers in flood- prone areas with insufficient defences where no improvements were planned over the next five years. However, in these cases, insurers would work with the customers and local authorities to explore ways to reduce the risks and make the property insurable in some form.
The ABI estimated that of the 2.2m properties at risk of flooding, only a "handful" were unable to obtain insurance cover. In addition, while the commitment covered only insurers' existing customers, the ABI said that last year its members were able to offer cover to 15,000 new customers in flood-prone areas. It said its commitment was dependent on the government reducing flood risk for 100,000 vulnerable homes over the next three years and maintaining investment in flood defences, taking into account the impact of climate change. It was also dependent on planning reforms to limit development on flood-prone areas, providing more details on flood risk and defence schemes and alleviating the risk of sewer and flash flooding.
Insurers would also continue to offer flood insurance to customers with homes or small businesses in areas that were adequately protected. However, the ABI warned that it could not guarantee cover for all flood-prone properties and where insurance was available the price of cover would reflect the risks involved. The commitment was also dependent on government action to reduce flood risks.
Elliot Morley, the environment and climate change minister, welcomed the commitment, saying it was underpinned by cross- government action to im-prove flood protection. The ABI said the new commitment would affect about 100,000 homes which were in vulnerable areasfor which improvements in flood defences were earmarked over the next five years. Such sites included Selby in North Yorkshire, Fordingbridge in Hampshire and West Bridgford, near Nottingham.
Stephen Haddrill, director-general of the ABI, said: "This is good news for the millions of homeowners and businesses who rely on insurance for financial protection from the cost of flooding." But he added: "We expect climate change dramatically to increase the flood risk, so continued improvements on the ground are vital. For flood insurance to remain widely available, the government must make further progress in reducing the risk in vulnerable communities."
The ABI said that while insurers would offer a "competitive market", the premiums charged would reflect the risks involved. It said its members could not guarantee cover for existing customers in flood- prone areas with insufficient defences where no improvements were planned over the next five years. However, in these cases, insurers would work with the customers and local authorities to explore ways to reduce the risks and make the property insurable in some form.
The ABI estimated that of the 2.2m properties at risk of flooding, only a "handful" were unable to obtain insurance cover. In addition, while the commitment covered only insurers' existing customers, the ABI said that last year its members were able to offer cover to 15,000 new customers in flood-prone areas. It said its commitment was dependent on the government reducing flood risk for 100,000 vulnerable homes over the next three years and maintaining investment in flood defences, taking into account the impact of climate change. It was also dependent on planning reforms to limit development on flood-prone areas, providing more details on flood risk and defence schemes and alleviating the risk of sewer and flash flooding.
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