Flood pain: ' People no longer need to live in fear to be insurable, ' says Environment Secretary Owen Paterson. Photo: Nick Wilkinson/EPAHundreds of thousands of homeowners affected by the flooding will still be able to buy insurance after an agreement was reached between the Government and the insurance industry.
The agreement will cap flood insurance premiums, linking them to Council tax bands so people will know who should pay the most. They are expected to protect up to 500,000 families, but you will have to wait until 2015 before the agreement enters into force. Minister Richard Benyon said: "there is still a lot of details to work out."
Under the terms of the scheme, known as Flood King, all domestic UK insurers will have to pay in £10,50 each to a fund that can be used to pay claims for people in high-risk homes. But the insurance industry says this has happened informally now, so policies should not increase premiums. The system will operate for 20-25 years, after which homeowners expect to protect themselves.
Houses built after 2009 will not be covered by the new CAP. Bove said: "we have to be absolutely sure that some of the errors committed in the past are not once again. We do not believe construction must take place in areas at risk of flooding. "
In the event of a huge flood event, which led to a national emergency, the Government would step in if money flood King regime was inadequate.
The agreement, which will be part of the water bill, follows months of negotiations on the future of belaying for properties at risk of flooding. A declaration of principles, that the obligation of insurers to continue to provide existing customers with coverage, but it was not for cost provisions would expire due to the end of July. Now that will continue until the new system comes into force.
Otto Thoresen, Chief Executive of the Association of British insurers, said that the priorities of its members had always been to ensure that flood insurance remains accessible and available to those who need it.
"Getting to this stage has required compromise on both sides, and there remain issues that need to be overcome," he said. "Insurers and the Government are working towards a shared vision, with flood King as a preferred choice of the Government."
The cap on the amount of families pay for flood insurance premiums will start no more than £210 per year in bands A and B, an increase of £540 per year in B and G.
Aiden Kerr, head of property at the ABI, said: "the Declaration of principles did not address anything about the price-only that insurers would have to offer a renewal. This new collection is designed to provide those at higher risk with an affordable coverage level. This will bring an end to anyone paying thousands of pounds for their insurance in flood risk areas, or huge excesses – with an excess of standard of between £ 250 and £ 500. "
Owen Paterson, the Environment Minister, said that there were still areas that need to be worked through. "Flooding is terrible for anyone affected by it and can lead to concerns that the next time there is rain. We have worked very hard with industry to reach an agreement on the future of flood insurance.
"People no longer need to live in fear to be insurable, and those most at risk can get protection now and in the future."
Paul Cobbing, Executive Director of the National Flood Forum, said there were still questions about the scheme. "We don't have the answers to the impact on families and how affordable and accessible this scheme will be for the people, and whether it protects those who are vulnerable.
"However, this is the preferred approach because it is actually what insurance is supposed to do, which is to provide coverage for all and sharing of risks between them, while other models did not do this."
The NFF said the number of calls to its helpline has tripled in the past year, with some callers reporting huge increases in the cost of their coverage and others saying that they managed to sell their properties. The rewards of some householders were doubled to £ 2,000 a year, and in one case a small company saw its premium will rise from £ 4,000 to £ 25,000 per year.
Shadow environment Secretary, Mary Creagh, warned: "the process announced today is fraught with difficulty and cannot be completed at the time of the next election".
Bove said new powers in your water bill to regulate directly the flood insurance premiums were a "fallback" plan.
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