AA laments lack of spending on flood defences
Home insurance premiums have fallen by 1.9% over the third quarter of 2014 to an average £225.41, despite extensive flooding earlier in the year.
AA Insurance managing director Janet Connor said: “Overall, the weather has been relatively benign for the past couple of years, notwithstanding the February floods, which cost insurers around £450m compared with £3.3bn following the 2007 disaster.
“As a result, insurers’ claims costs have been lower than expected, meaning that business has continued to be profitable and has allowed reserves to be grown. This has translated into lower premiums.”
However, geographical differences in premiums mean that properties at high risk of flooding are likely to have seen large increases in premiums.
Connor said that this highlighted the need for further work on flood risk properties, and was disappointed at the delay to the implementation of Flood Re.
“During February the Prime Minister said that ‘money is no object’ with regard to flood defence spending,” she said. “Yet the £140m currently promised for flood alleviation investment is lamentably insufficient to keep pace with climate change, which is expected to expose a further quarter of a million homes to significant risk of flooding over the next two decades.
“Tens of thousands of homes are vulnerable and must benefit from flood defence spending, while those still prone to flooding should be able to obtain affordable home insurance with introduction of Flood Re.”