The recent serious flooding in many parts of the country has triggered demands to bring forward Flood Re, the proposed new agreement between the Government and insurers on affordable flood insurance. This isn’t due to come into force until the summer of 2015.
There have been reports in the press of the anger felt by homeowners in flood-hit areas over the uncertainty for the future of flood insurance. This was particularly highlighted by a confrontation between a resident of a waterlogged Yalding in Kent and the Prime Minister.
This confrontation prompted responses from both the Government and insurers, who say they have no intention of speeding up the process to finalise the agreement. There is still a long way to go. A spokesperson for the Association of British Insurers was quoted as saying: “What we’ve now got is a framework that the Government agrees is the only way forward but we shouldn’t underestimate the work that needs to be done to meet the deadline.”
A tortuous path to agreement
We’ve been following closely the tortuous path towards the implementation of Flood Re. This is included in the Water Bill, which is currently going through Parliament and won’t pass its last legislative hurdle until summer 2015 (see our recent blog on this). If the past few years are anything to go by, then we are likely to see significant instances of flooding across the country during this time, which could make final agreement even more difficult to reach.
The insurers are sticking to their commitment to provide insurance to existing customers under the terms of the old Statement of Principles, which expired some time ago. But the future of affordable flood insurance for those in high-risk areas is still uncertain.