There’s a glimmer of hope in the continuing saga of the agreement between the Government and insurers guaranteeing cover for homes in high-risk flood areas. This was due to run out at the end of June but yesterday it was announced that the Association of British Insurers (ABI) has voluntarily extended the agreement for a month to allow negotiations to continue.
We mentioned this in an earlier blog. The existing agreement, called the Flood Insurance Statement of Principles, meant that insurers would provide cover for properties in high-risk flood areas in return for extra state investment in flood defences. If a new agreement is not reached, insurers will no longer guarantee offering flood cover, which will result in an estimated 200,000 householders facing difficulties. This in turn will have a huge impact on mortgage offers and property values.
More time to resolve ‘complex issues’
There seemed to be no likelihood of an end to this impasse in the near future. Some expected mention of it in last week’s Queen’s Speech, but this didn’t materialise. However it has now been announced that the ABI’s members have agreed ‘to continue to meet their commitments to offering flood insurance under the existing industry agreement for one extra month after it expires on June 30 while complex issues are resolved’.
That’s very good news, but it also means there is still some way to go before agreement is reached. We wait with bated breath.