Nick Clegg challenges the government to help provide affordable home insurance

Gordon Brown has come under pressure to offer incentives to the insurance industry to increase the take-up of insurance by the UK’s poorest people.

The Liberal Democrats are calling for the development of social insurance tariffs for the poorest people.

The scheme would be similar to that run by many gas and electricity suppliers that offer special tariffs to the poor and cut some of the surcharges.

Liberal Democrat leader, Nick Clegg said with the poorest people struggling to get contents insurance it was now time for the government to consider such a move.

He said: “The government and insurance industry need to work in partnership to ensure that affordable home insurance is available to those living in flood-prone areas.

“This is a real problem. Only half of the poorest tenth of the population have contents insurance. We must explore new initiatives such as social insurance tariffs for the very poorest.”

The calls came as Clegg unveiled his 10-point plan to protect the country from the worse effects of flooding, including increasing the flood defence budget by £400m over a parliament.

Last year, Sir Michael Pitt’s interim report into the summer flooding called on the government and insurance industry to join forces and design a programme to educate people on the benefits of insurance

A spokesman for the ABI said the trade body was looking at ways to encourage the less well off to buy insurance, as part of the body’s financial inclusion initiative.

He highlighted the insure-with-rent programme that has been running for a number of years that enables council and housing association tenants to buy some home contents insurance cover when paying their rent.

“We want to work with local authorities to develop insurance products suited to low income households,” said the spokesman.

A Defra spokesperson said: “The government is working with the insurance industry through the Financial Inclusion Taskforce to develop options for promoting increased take-up of key insurance products among financially excluded households.”

The Lib-Dem’s 10-point flood protection plan includes:

Allow the Environment Agency to take strategic responsibility for flood defence management and planning.

Increase the flood defence budget by £400m over a parliament

Improve public awareness of the importance of buildings and contents insurance in flood risk areas

Strengthen existing legislation concerning development in flood plains

Bring in a Flooding Act.