Fool News: Flood Households Could Be Refused Cover

Mortgages and Home

11 October 2007 | 0 Comments

Homeowners in flood-prone areas may not be able to protect themselves against disasters in the future.

Homeowners living in flood-prone areas may not be able to protect themselves against such disasters in the future, insurers have warned.Following the Pre-Budget Report , The Association of British Insurers (ABI) has attacked the government for not allocating enough funds to develop flood defences.Insurers have so far spent around £3 billion repairing the damage caused by the summer's floods. Norwich Union, Britain's largest insurer, warned back in August that premiums for homes in areas with high flood risk could rise by some ten per cent.In yesterday's report, the chancellor announced that £2.15 billion would be spent on flood defences between next year and 2011.According to the ABI, this figure is "less than we were asking for, even before the floods" and shows that the Treasury has "completely failed to grasp the importance of improving Britain's flood defences". The Association also emphasised its intention to "review" its commitment to continuing to provide cover for homeowners in high risk areas.Unless the government rethinks the amount it is willing to commit to flood defences, it seems that those people in high-risk areas - some 570,000 households - may become unable to protect their properties no matter how much they are willing to pay.

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