Wednesday, 22 October 2014

Households at risk of flooding face no insurance if agreement is not made

Insurance talks break down

Plans to broker an insurance deal for flood-hit social housing tenants have stalled after negotiations between the government and insurers broke down.

The Northern Housing Consortium had entered talks with the Department for Environment, Food and Rural Affairs about underwriting social housing flooding insurance in order to protect low-income tenants living in at-risk homes from huge premiums.

But as much of the south west and north of England and parts of Wales were deluged by floods this week, Charlotte Harrison, head of policy at the NHC, said: ‘The signals coming from the conversation aren’t positive.’

The NHC had been representing social housing organisations as part of negotiations between the government and the Association of British Insurers in talks to find an alternative to the existing agreement which obliges insurers to cover households at risk of flooding. The agreement runs out in June 2013.

The NHC hoped the government would underwrite the extra cost of insuring homes susceptible to flooding so tenants would not have to pay more for their insurance premiums. But the government is struggling to get insurers to sign up to a deal, leaving many households unable to get insurance at all.

Ms Harrison said: ‘We’ve been feeding through the social housing agenda to ABI to help them in their conversations with the government. We’re really concerned that levels of insurance might decrease in the next year or two as welfare reform kicks in because it will start to become a luxury that people don’t want to spend on.’

This week, around 1,000 properties across the UK were affected by flooding. Some 500 residents in St Asaph, Wales, were evacuated when water levels began rising in the early hours of Tuesday morning.

Clwyd Alyn Housing Association, part of the Pennaf Housing Group, manages 28 of the homes in St Asaph which were affected by the floods and had to evacuate tenants in ground floor flats.

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