ABI Talks Tough Over Flood Insurance
As more and more UK home owners become acutely aware of the constant risk of flooding, it seem as though last years £3 billion clean up bill was too much for the insurance companies to stomach. The Association of British Insurers (ABI) has come out fighting for its members with claims that more than half a million homes in the UK are at risk of flooding. The ABI is refusing to advise members to offer cover to homes at risk, unless the government step in with further significant investment in flood defences.
Historically the flood protection section of traditional household insurance assumed that the average UK home would experience floods on average ever 75 years. This in affect gave the insurance companies 75 years on average to build up a fund to cover any flood claims as and when they happened. Last year was the worst on record for floods in the UK and has caused many insurance companies to revisit their historical risk calculations.
As a consequence we could see literally hundreds of thousands of UK homes refused flood cover unless the authorities are able to guarantee massive cash injections into the UK’s ailing flood defences. Quite where the government will find the extra money required remains to be seen.
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