Insurers are offering hope to around 200,000 homeowners who have been unable to get flood cover for their homes under a scheme dubbed ‘Project Noah’.
Insurance broker Marsh is proposing universal cover which would place all of Britain’s homes in a single risk pot – the idea being that insurers would be more willing to support it because the whole country is unlikely to flood at once.
The current ad hoc agreement with insurers, known as the Flood Insurance Statement of Principles, is due to expire in June 2013 and the Association of British Insurers has warned that without a replacement, around 200,000 households could become uninsurable.
The ABI has proposed a plan to cover flood-risk areas instead of the whole country, but it would need underwriting by the Government.
Floods in England and Northern Ireland in the summer of 2007 cost the economy £3.2 billion, while the flooding around Cockermouth in Cumbria in 2009 cost £276.5 million.
The Local Government Association wrote to the Government in February, claiming that failure to come up with an alternative insurance agreement could potentially risk an £11 billion liability.
Clare Whelan at the LGA said at the time: “We simply cannot afford to take the risk of being left to foot a multi-billion pound bill if we see more devastating scenes like those in Cockermouth three years ago.”
Project Noah was welcomed today by the British Insurance Brokers’ Association.
Eric Galbraith, BIBA’s chief executive, said: “Project Noah is a deliverable reinsurance solution ensuring flood insurance availability for UK homes.
“The Government can focus their spending on improving flood defences while homeowners should be paying a more equitable premium.”
Ministers have pledged to issue a statement on flood insurance in the spring.
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