Flooding: Insurance

Lord Greaves Excerpts

Thursday 29th November 2012 Lords Chamber

Asked by

[Lord Greaves]

To ask Her Majesty’s Government what action they are taking to make sure that house insurance is available for residents in areas that are liable to flooding.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley)]

My Lords, the future of flood insurance is a priority for the Government. We remain committed to discussions with the insurance industry and others about what replaces the statement of principles. We want a solution that ensures affordable insurance bills for those at flood risk but does not place unsustainable costs on wider policyholders and the taxpayer. Our primary focus is flood-risk management, on which we are spending more than £2.17 billion over four years.

[Lord Greaves]

My Lords, there are now at least 200,000 households in high-risk flood areas whose properties are virtually uninsurable against flood. The discussions with the insurance industry have been taking place for years. There are now only seven months before the existing statement of principles runs out, and that itself is less useful by the week. Do the Government support the practical proposal from the Association of British Insurers, on behalf of the insurance industry, for a non-profit-making flood insurance fund to provide insurance against flooding for properties in high-risk areas basically funded by cross-subsidies from the rest of us who are fortunate enough not to live in high-risk flood areas? If so, why are the negotiations on this matter being blocked by high-ranking Ministers in the coalition Government from another party?

[Lord De Mauley]

My Lords, this is a serious matter. We have been working very hard with the industry on this extremely complex issue. We need a lasting solution that ensures affordable insurance bills for those at flood risk but does not place unsustainable costs on wider policyholders and the taxpayer. The ball is now in the industry’s court. The ABI understands the Government’s position. It is up to the ABI to come back to us with a practical and sustainable option that provides insurance for those that need it without increasing bills for all or placing unacceptable burdens on the taxpayer.