TIME is ticking away for flood-hit homeowners trying to get insurance cover as talks drag on between the Government and insurers.
MP Harriett Baldwin and the Worcestershire-based National Flood Forum are calling for a speedy conclusion to talks between the Department for Environment, Farming and Rural Affairs and the
Association of British Insurers (ABI), and give relief to those needing new flood cover.
Mrs Baldwin said flood victims were now “anxiously waiting” for the deal, saying agreement was “essential”.
Discussions have dragged on since last year, and although “intensive discussions” are under way, no agreement on how to pay for cover has yet emerged.
Time is now short, because the agreement which helps keep the payments for flood cover affordable – called the statement of principles – runs out in June 2013.
It works by a subsidy arrangement, so all households with home insurance pay a levy on their policies which helps to cover those homes deemed at risk of flooding.
However, because the end of the agreement is less than a year away – and householders pay for annual cover – insurers are having to come up with predictions in the face of increasing uncertainty,
leading to some eye-watering quotes.
Mrs Baldwin said: “People who are currently renewing their insurance are worried that they won’t be able to get cover next year.”
Charles Tucker, NFF chairman, said he knew of a case where a householder had been quoted £2,500 for cover.
The NFF pointed them in the direction of another insurer, which povided them with cover for £800 instead.
“Getting agreement on a replacement for the statement of principles is an urgent priority,” said Mr Tucker.
“In fairness to insurers, in the absence of anything to take its place they are already costing in the price of cover on their policies and we are increasingly seeing that, and it will continue.
“There is complete uncertainty, and uncertainty is not something insurers like.”
He said the Treasury was “pulling the strings” to some extent, because having funded flood defences such as those at Pershore, Kempsey, Upton, Uckinghall and Powick, government is unwilling to put
in more money to help subsidise insurance cover.
A Defra spokesman said: “There has been no update, and it is not known when the next ministerial update will be. Nothing has changed since July. We’re looking at various options and are optimistic
an agreement will be reached.”