‘Crucial’ that ABI and government reach agreement on future with deadline approaching
Failure to resolve the future of UK flood insurance will affect approximately 200,000 homes in flood-prone areas, PwC has warned.
The consultancy firm said that with the Statement of Principles due to expire on 1 July 2013, an agreement between the Association of British Insurers and the government on a replacement was crucial.
Under the current agreement, insurers provide affordable flood cover for homes and small businesses in flood-prone areas on the condition that the government spends a certain amount on flood defences.
PwC insurance partner Mohammad Khan said: “Customers currently affected will see their premiums rise even if they renew before July 2013 – their renewal price increase could be anywhere between 10% and 50%. After July, for households based in flood plains, prices could increase even more, making insuring your home against flood damage potentially unaffordable for many. Therefore, an agreement between the ABI and the government on the future of UK flood insurance is crucial.”
PwC’s head of catastrophe management Domenico del Re said: “Our message to homeowners is simple, be prudent and prepare for the worst case scenario, which involves no new agreement being reached.
“Households at risk should give consideration to making their homes more flood resilient from 1 July 2013. Typically, these changes are not cheap and cost between £20,000 and £40,000, however, your investment may ensure your home is insurable in the future.”
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